Technology legal updates from Shoosmiths LLPhttps://www.shoosmiths.co.uk/rss/technology.aspxTechnology legal updates from Shoosmiths LLPen-GBShoosmithshttps://www.shoosmiths.co.uk/-/media/shoosmiths/shoosmiths-rss-image.jpg?h=144&w=144Technology legal updates from Shoosmiths LLPhttps://www.shoosmiths.co.uk/rss/technology.aspx60{57874D43-AC46-4ACC-88F9-458B3B518B6F}https://www.shoosmiths.co.uk/news/press-releases/shoosmiths-is-sponsoring-leeds-digital-festival-2019.aspxShoosmiths is sponsoring Leeds Digital Festival 2019The Leeds office of national law firm Shoosmiths is gearing up to celebrate the very best of the city’s digital technology sector this week, as Leeds Digital Festival gets underway for its fourth consecutive year.Tue, 23 Apr 2019 00:00:00 +0100<![CDATA[Lee Perry]]><![CDATA[The Leeds office of national law firm Shoosmiths is gearing up to celebrate the very best of the city’s digital technology sector this week, as Leeds Digital Festival gets underway for its fourth consecutive year.]]>{5E09F046-C78F-4FFF-8582-F9429A2419E9}https://www.shoosmiths.co.uk/news/press-releases/shoosmiths-advises-launch-mobile-network-operator-14640.aspxShoosmiths advises on launch of ground breaking mobile network operator The national technology, media and telecoms team at law firm Shoosmiths has advised new client Goshawk Communications on a series of deals through which its ground breaking technology will be rolled out to the mobile operator market. The product, MT clearSound, has been launched in the Isle of Man through Manx Telecom plc, and will be rolled out in the UK in 2019 through an agreement with EE under which a new MVNO has been set-up.Fri, 21 Sep 2018 00:00:00 +0100<![CDATA[Richard Millington ]]><![CDATA[The national technology, media and telecoms team at law firm Shoosmiths has advised new client Goshawk Communications on a series of deals through which its ground breaking technology will be rolled out to the mobile operator market. The product, MT clearSound, has been launched in the Isle of Man through Manx Telecom plc, and will be rolled out in the UK in 2019 through an agreement with EE under which a new MVNO has been set-up.]]>{9A89782B-8551-40B3-BFCF-1090CF275D12}https://www.shoosmiths.co.uk/client-resources/legal-updates/sap-uk-v-diageo-the-unexpected-price-of-admission-12608.aspxSAP UK v Diageo - the (unexpected) price of admission This article looks at the case of SAP UK v Diageo. In a decision set to be felt across the SAP user base, Justice O'Farrell, sitting in the Technology and Construction court, ruled in favour of SAP UK ('SAP') in relation to its attempt to recover licence fees for indirect user access to its mySAP ERP ('ERP') software products. SAP UK Ltd v Diageo Great Britain Ltd [2017] EWHC 189 (TCC) saw O'Farrell J accept SAP's submissions that all user access to ERP, direct or indirect, and regardless of whether machine intermediated, amounted to access under the agreement between the parties, and was therefore liable for licence fees. Cloudy, with a chance of dispute From May 2004 until the present dispute, the parties: Diageo - a global beverage distributor, and SAP - a leading multinational enterprise software house, enjoyed a commercial relationship in which SAP provided Diageo with access to its ERP software in exchange for substantial licence fees. Diageo deployed ERP to manage numerous business critical assets including manufacturing, stock and supply chain, financial reporting and control, and human resource management. In addition to ERP, Diageo utilised SAP's Process Integration ('PI') software, an integration layer allowing third party software to interface and access data from SAP databases. Diageo's licence fee for access to SAP's products was calculated against a 'Named User' metric, segmented into various categories. Any aspect of Diageo's business (or third party agents, consultants etc.) requiring direct or indirect access to any SAP software or database fell under the definition of Named User. Licence fees and access controls were levied against users on the basis of their categorisation within Named Users. Arrested development The party's dispute arose as a result of Diageo's development and deployment of two new software systems: Diageo Gen2 - an iPad based Salesforce app, allowing Diageo's sales and service representatives access to customer visit and call data; and Diageo Connect - a customer facing app, allowing Diageo's client's to place orders online, again by way of a Salesforce system, obviating the need for call centre transactions. While both Gen2 and Connect leveraged Salesforce (an SAP competitor) code and design, both, through a relatively complex chain of machine-to-machine access, interfaced via PI with ERP. In simple terms, while neither of Diageo's bespoke apps were in a strict sense 'front ends' to SAP's database, through PI's integration layer, both could access and/ or edit data within the ERP database. With the licence agreement silent in relation to ERP access to PI enabled third party software, and with an explicit statement that no licence fee was chargeable for data passing from one SAP application to another, Diageo concluded its licence in respect of PI was analogous to that of a 'gatekeeper'. In effect, the PI licence fee covered the functionality the integration layer provided, but did not, in Diageo's view, oblige the drinks distributor to pay any additional sums for access through it, on a per-user basis. SAP, predictably, did not share this view. The software house maintained that any use of SAP products, EPR database or otherwise, whether or not facilitated by PI, amounted to direct or indirect access as defined by the agreement. Diageo's almost 6,000 ultimate customers, indirectly accessing and creating data within the ERP database in order to place orders through Connect, did therefore, amount to Named Users. In addition, all sales staff using Gen2 would require individual licencing, without which their access to customer data held on ERP through Gen2 would be unauthorised. The devil in the drafting In her Judgement, Justice O'Farrell rejected Diageo's submission of PI as licenced on a 'gatekeeper' basis, finding 'a separate basis of pricing for. PI software, which applies even where there is a named user licence for.ERP'. In siding with SAP, the Judge ruled 'it is clear that [the PI licence fee] is an addition, rather than an alternative, to authorisation under a named user licence'. While accepting 'there is no applicable named user category for the Connect customers [within the agreement]', O'Farrell J nonetheless found in SAP's favour, ruling 'only named users are authorised to use or access [ERP] software directly or indirectly. Named user pricing is the only basis on which the [ERP] software was and is licensed to Diageo'. According to the Judgement, Diageo customer's indirect access to ERP, through Connect, was not a category of Named User explicitly referenced in the agreement. Nevertheless since only Named Users were entitled to access SAP software under the agreement, the Judgment concluded that such users must fall within Named Users, one way or the other. Their access therefore levied licence fees. In addition, Justice O'Farrell sided with SAP in agreeing that 'additional licence and maintenance fees.were payable [for ERP access not explicitly defined] in the agreement'. As a result, Diageo would be required to make appropriate payments in respect of indirect access, facilitated by PI, regardless of whether that access was envisaged at the time of signing the agreement. In the slimmest possible silver lining, O'Farrell J did reject SAP's full demand (totalling some £54 million), instead ruling that licence fees in relation to indirect third party software access ought to be levied at a rate significantly lower than the standard sum of £9,400 per user. Final quantum will be determined at a later hearing. Conclusion SAP v Diageo raises significant contractual and operational concerns for any business deploying SAP software products. Understanding that any access to ERP data might present significant licence liabilities, including access through what might appear to be decidedly abstract vectors, will likely become a key risk profile consideration. Given that it can now be assumed that any B2B data flow involving an SAP database, whether via internal or external users, may trigger licence fee obligations, comprehensive review of any SAP agreements should now be conducted as an internal audit priority. A complete understanding of the extent to which a business grants ERP data access to internal and external parties, is key to avoiding a nasty future licence fee surprise. Time, and a forthcoming costs hearing, will determine the extent to which Diageo itself will be required to pay for its misunderstanding. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Wed, 15 Mar 2017 00:00:00 Z<![CDATA[Craig Armstrong Joseph Stephenson ]]><![CDATA[ This article looks at the case of SAP UK v Diageo. In a decision set to be felt across the SAP user base, Justice O'Farrell, sitting in the Technology and Construction court, ruled in favour of SAP UK ('SAP') in relation to its attempt to recover licence fees for indirect user access to its mySAP ERP ('ERP') software products. SAP UK Ltd v Diageo Great Britain Ltd [2017] EWHC 189 (TCC) saw O'Farrell J accept SAP's submissions that all user access to ERP, direct or indirect, and regardless of whether machine intermediated, amounted to access under the agreement between the parties, and was therefore liable for licence fees. Cloudy, with a chance of dispute From May 2004 until the present dispute, the parties: Diageo - a global beverage distributor, and SAP - a leading multinational enterprise software house, enjoyed a commercial relationship in which SAP provided Diageo with access to its ERP software in exchange for substantial licence fees. Diageo deployed ERP to manage numerous business critical assets including manufacturing, stock and supply chain, financial reporting and control, and human resource management. In addition to ERP, Diageo utilised SAP's Process Integration ('PI') software, an integration layer allowing third party software to interface and access data from SAP databases. Diageo's licence fee for access to SAP's products was calculated against a 'Named User' metric, segmented into various categories. Any aspect of Diageo's business (or third party agents, consultants etc.) requiring direct or indirect access to any SAP software or database fell under the definition of Named User. Licence fees and access controls were levied against users on the basis of their categorisation within Named Users. Arrested development The party's dispute arose as a result of Diageo's development and deployment of two new software systems: Diageo Gen2 - an iPad based Salesforce app, allowing Diageo's sales and service representatives access to customer visit and call data; and Diageo Connect - a customer facing app, allowing Diageo's client's to place orders online, again by way of a Salesforce system, obviating the need for call centre transactions. While both Gen2 and Connect leveraged Salesforce (an SAP competitor) code and design, both, through a relatively complex chain of machine-to-machine access, interfaced via PI with ERP. In simple terms, while neither of Diageo's bespoke apps were in a strict sense 'front ends' to SAP's database, through PI's integration layer, both could access and/ or edit data within the ERP database. With the licence agreement silent in relation to ERP access to PI enabled third party software, and with an explicit statement that no licence fee was chargeable for data passing from one SAP application to another, Diageo concluded its licence in respect of PI was analogous to that of a 'gatekeeper'. In effect, the PI licence fee covered the functionality the integration layer provided, but did not, in Diageo's view, oblige the drinks distributor to pay any additional sums for access through it, on a per-user basis. SAP, predictably, did not share this view. The software house maintained that any use of SAP products, EPR database or otherwise, whether or not facilitated by PI, amounted to direct or indirect access as defined by the agreement. Diageo's almost 6,000 ultimate customers, indirectly accessing and creating data within the ERP database in order to place orders through Connect, did therefore, amount to Named Users. In addition, all sales staff using Gen2 would require individual licencing, without which their access to customer data held on ERP through Gen2 would be unauthorised. The devil in the drafting In her Judgement, Justice O'Farrell rejected Diageo's submission of PI as licenced on a 'gatekeeper' basis, finding 'a separate basis of pricing for. PI software, which applies even where there is a named user licence for.ERP'. In siding with SAP, the Judge ruled 'it is clear that [the PI licence fee] is an addition, rather than an alternative, to authorisation under a named user licence'. While accepting 'there is no applicable named user category for the Connect customers [within the agreement]', O'Farrell J nonetheless found in SAP's favour, ruling 'only named users are authorised to use or access [ERP] software directly or indirectly. Named user pricing is the only basis on which the [ERP] software was and is licensed to Diageo'. According to the Judgement, Diageo customer's indirect access to ERP, through Connect, was not a category of Named User explicitly referenced in the agreement. Nevertheless since only Named Users were entitled to access SAP software under the agreement, the Judgment concluded that such users must fall within Named Users, one way or the other. Their access therefore levied licence fees. In addition, Justice O'Farrell sided with SAP in agreeing that 'additional licence and maintenance fees.were payable [for ERP access not explicitly defined] in the agreement'. As a result, Diageo would be required to make appropriate payments in respect of indirect access, facilitated by PI, regardless of whether that access was envisaged at the time of signing the agreement. In the slimmest possible silver lining, O'Farrell J did reject SAP's full demand (totalling some £54 million), instead ruling that licence fees in relation to indirect third party software access ought to be levied at a rate significantly lower than the standard sum of £9,400 per user. Final quantum will be determined at a later hearing. Conclusion SAP v Diageo raises significant contractual and operational concerns for any business deploying SAP software products. Understanding that any access to ERP data might present significant licence liabilities, including access through what might appear to be decidedly abstract vectors, will likely become a key risk profile consideration. Given that it can now be assumed that any B2B data flow involving an SAP database, whether via internal or external users, may trigger licence fee obligations, comprehensive review of any SAP agreements should now be conducted as an internal audit priority. A complete understanding of the extent to which a business grants ERP data access to internal and external parties, is key to avoiding a nasty future licence fee surprise. Time, and a forthcoming costs hearing, will determine the extent to which Diageo itself will be required to pay for its misunderstanding. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. ]]>{1F2959D1-DD6D-4411-B00C-4E4D845E13B6}https://www.shoosmiths.co.uk/rss/what-does-brexit-mean-for-uk-franchising-part-two-12400.aspxWhat does Brexit mean for UK franchising? - part two Further to our previous article 'What does Brexit mean for UK franchising? - part one', franchise businesses should carefully consider the material issues initiated by Brexit, as we see them today. Compliance with regulation The UK franchise system currently follows the European Franchise Federation and its code of ethics, but is based on a system of self-regulation, which is unlikely to be affected by Brexit. Although there is no body of UK 'franchise law' there are a number of laws which have their origin in European legislation, which currently UK franchise businesses take advantage of. For example, EU competition law, which the UK will need to revisit to determine exclusivity and price maintenance issues. This could be a positive change for international franchising in the UK. Given the timeframes and trepidation culture surrounding data protection and security, we highlight that Brexit is unlikely to impact the implementation of the highly publicised General Data Protection Regulation ('GDPR'). This is important as the number of B2C franchise businesses operating in the UK, which amass customer data, is ever increasing. In any event, UK entities dealing with EU citizens' data will need to comply and commentators suggest the UK is likely to adopt a similar framework. As such, best practice is to continue to gear up for compliance. People - employees and immigration Franchise networks are likely to be substantially impacted by changes in immigration laws caused by Brexit. However, at the moment the Brexit vote's impact on immigration is unclear. For example, mobility restrictions, labour shortages and/or loss of talent are possible. In addition, the employment laws most likely to change are those relating to agency workers, collective consultation and working time rights. Fortunately, franchisors have two years to consider their employment strategy, but in the short term there are a number of areas of employment law which are outside of the scope of European control which are likely to remain unchanged. For example, minimum wage regulation. So, what now... The recent approach to EU law has been that of harmonization but a Brexit vote potentially leads the UK in the opposite direction and therefore, towards uncertainty. In addition, given that franchising growth in the UK over the last ten years has, notably, been in B2C systems the impact to consumer confidence will play a pivotal role on the impact of Brexit on the UK franchising industry. The good news is that during the 2007/2008 financial downturn franchising resisted the negative economic trends and continued to develop, while the GDP and employment fell. Regardless of this, franchise businesses should be considering the points above and how these challenges impact on their goals of continued and sustainable growth. So, what should franchise businesses be doing now? monitor progress of Brexit - as many of the impacts are unknown, franchise businesses need to keep abreast of the evolving Brexit landscape start financial planning, given that the impact of Brexit is currently so uncertain your business will need to plan for each eventuality and the costs associated, in order to adapt review your supply chain, particularly if it includes sourcing or providing services or products to EU member states, and negotiate price being mindful of the value of Sterling and currency fluctuation review your franchise agreement - are there are triggers or issues which need to be addressed in the short term and for which a strategy should be deployed for the medium/long term? undertake an IP audit to evaluate your enforcement rights and protection review NDA/confidentiality agreements and provisions to ensure sufficient protection for your model continue working towards data privacy and security best practice complete a workforce audit - for example, embark on an assessment of reliance on foreign workers, make relevant applications and communicate with concerned employees If you'd like to know more, please contact us for a copy of our Commercial Contracts Brexit Toolkit or follow the link to Shoosmiths' Brexit Hub. Alternatively, please contact Shoosmiths' franchise expert Magdalena Konig. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Thu, 26 Jan 2017 00:00:00 Z<![CDATA[JP Buckley ]]><![CDATA[ Further to our previous article 'What does Brexit mean for UK franchising? - part one', franchise businesses should carefully consider the material issues initiated by Brexit, as we see them today. Compliance with regulation The UK franchise system currently follows the European Franchise Federation and its code of ethics, but is based on a system of self-regulation, which is unlikely to be affected by Brexit. Although there is no body of UK 'franchise law' there are a number of laws which have their origin in European legislation, which currently UK franchise businesses take advantage of. For example, EU competition law, which the UK will need to revisit to determine exclusivity and price maintenance issues. This could be a positive change for international franchising in the UK. Given the timeframes and trepidation culture surrounding data protection and security, we highlight that Brexit is unlikely to impact the implementation of the highly publicised General Data Protection Regulation ('GDPR'). This is important as the number of B2C franchise businesses operating in the UK, which amass customer data, is ever increasing. In any event, UK entities dealing with EU citizens' data will need to comply and commentators suggest the UK is likely to adopt a similar framework. As such, best practice is to continue to gear up for compliance. People - employees and immigration Franchise networks are likely to be substantially impacted by changes in immigration laws caused by Brexit. However, at the moment the Brexit vote's impact on immigration is unclear. For example, mobility restrictions, labour shortages and/or loss of talent are possible. In addition, the employment laws most likely to change are those relating to agency workers, collective consultation and working time rights. Fortunately, franchisors have two years to consider their employment strategy, but in the short term there are a number of areas of employment law which are outside of the scope of European control which are likely to remain unchanged. For example, minimum wage regulation. So, what now... The recent approach to EU law has been that of harmonization but a Brexit vote potentially leads the UK in the opposite direction and therefore, towards uncertainty. In addition, given that franchising growth in the UK over the last ten years has, notably, been in B2C systems the impact to consumer confidence will play a pivotal role on the impact of Brexit on the UK franchising industry. The good news is that during the 2007/2008 financial downturn franchising resisted the negative economic trends and continued to develop, while the GDP and employment fell. Regardless of this, franchise businesses should be considering the points above and how these challenges impact on their goals of continued and sustainable growth. So, what should franchise businesses be doing now? monitor progress of Brexit - as many of the impacts are unknown, franchise businesses need to keep abreast of the evolving Brexit landscape start financial planning, given that the impact of Brexit is currently so uncertain your business will need to plan for each eventuality and the costs associated, in order to adapt review your supply chain, particularly if it includes sourcing or providing services or products to EU member states, and negotiate price being mindful of the value of Sterling and currency fluctuation review your franchise agreement - are there are triggers or issues which need to be addressed in the short term and for which a strategy should be deployed for the medium/long term? undertake an IP audit to evaluate your enforcement rights and protection review NDA/confidentiality agreements and provisions to ensure sufficient protection for your model continue working towards data privacy and security best practice complete a workforce audit - for example, embark on an assessment of reliance on foreign workers, make relevant applications and communicate with concerned employees If you'd like to know more, please contact us for a copy of our Commercial Contracts Brexit Toolkit or follow the link to Shoosmiths' Brexit Hub. Alternatively, please contact Shoosmiths' franchise expert Magdalena Konig. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. ]]>{D17E328E-F9CA-4FDF-969D-E9CCBCA12670}https://www.shoosmiths.co.uk/client-resources/legal-updates/what-does-brexit-mean-for-uk-franchising-part-one-12369.aspxWhat does Brexit mean for UK franchising? - part one 2016 was a year of change. The ripples of these changes will continue for years to come, as the UK navigates its way through the process of triggering Article 50 and its exit of the EU. There are a number of key considerations franchisors and franchisees need to assess over this period. That's not to say that businesses should make rash or knee jerk decisions, because the real impact of the Brexit vote is yet to be seen. As such, from a legal perspective, there is not likely to be upheaval for a few years yet. However, part one and part two of this article consider the material issues initiated by Brexit, as we see them today, which could impact a franchise business. Day to day - currency and supply chain To date, Brexit has already had a noticeable impact on costs given that the value of the pound has plummeted. As such, franchise businesses continue to see their cost base increase. In the short term, franchise businesses therefore need to assess if they can pass these costs on and/or whether this will filter through to the end customer. Temporary relief and longer term commercial arrangements should then be reflected. For example, can price adjustment mechanisms be triggered; can any of these arrangements be terminated/renegotiated? For the medium term, flexibility through this period of uncertainty could be valuable, especially as it remains unclear what trade barriers or importing/exporting duties could be applied in the future. Financial planning is imperative to provide for agility to adapt to any relevant changes which may impact franchise businesses. Transparency of such planning is key, for example, when engaging with prospective franchisees, franchise businesses need to keep in mind the need to avoid misrepresentation. This is even more important, given the Brexit vote, as the impact on franchise funding opportunities is unclear. Although we note that as the time of writing this, franchise lenders such as HSBC, Lloyds, RBS and NatWest have asserted that Brexit will not impact adversely on their lending decision making. Enforcing your franchise agreement - dispute resolution and territory Franchise businesses should consider if Brexit may trigger termination of its franchise agreement for example, by virtue of material adverse change or force majeure. As such, in due course, franchisors should audit their contracts to fully assess the impact of Brexit on its portfolio, if any. Depending on the drafting of the relevant franchise agreement, it may grant rights throughout the EU. When the UK leaves the EU, it could have the (probably unintended) effect of removing the UK from the scope of the agreement. Not only this, franchise businesses operating in more than one jurisdiction should be mindful of the future landscape for cross-border enforcement of judgments in the EU and UK. As legislation governing this area originates from the EU, the UK will need to re-consider the options available to it for example, entering into bilateral/multi-lateral agreements with other countries. Protection of your franchise model - intellectual property rights and trade secrets Brand and know how are important to franchise businesses, however the effect of Brexit for brand owners is unknown at this time and it is unclear whether or not current rights will exist post-Brexit. There is uncertainty for businesses who own EU trade marks (EUTMs) (formerly known as Community trade marks), which may no longer be applicable in the EU or to UK-based owners following Brexit. Businesses that are considering new trade mark applications should consider whether filing for an EUTM is really necessary, or whether a UK registration is actually sufficient. The EU's recent implementation of a new trade secrets Directive may cause concern for franchisors, however the impact of Brexit on trade secrets is likely to be minimal as the UK's current standards are largely the same as the EU's. Operations manuals/handbooks, logos, unregistered trade marks, databases and software constitute valuable rights of any franchisor. The protection of such material, via copyright and cross-border intellectual property protection against infringers, is largely aligned across the EU, but the influence of Brexit on such rights and/or protection is uncertain. Despite the uncertainty, franchisors can be proactive by carrying out health checks of their IP portfolios to ensure that they are in a strong position should changes be made. Franchisors should also ensure their NDA/confidentiality agreements and provisions are reviewed such that they provide sufficient protection for their model. For further consideration of the material issues initiated by Brexit, which could impact franchise businesses, please see our next article 'What does Brexit mean for UK franchising? - part two'. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Mon, 23 Jan 2017 00:00:00 Z<![CDATA[ 2016 was a year of change. The ripples of these changes will continue for years to come, as the UK navigates its way through the process of triggering Article 50 and its exit of the EU. There are a number of key considerations franchisors and franchisees need to assess over this period. That's not to say that businesses should make rash or knee jerk decisions, because the real impact of the Brexit vote is yet to be seen. As such, from a legal perspective, there is not likely to be upheaval for a few years yet. However, part one and part two of this article consider the material issues initiated by Brexit, as we see them today, which could impact a franchise business. Day to day - currency and supply chain To date, Brexit has already had a noticeable impact on costs given that the value of the pound has plummeted. As such, franchise businesses continue to see their cost base increase. In the short term, franchise businesses therefore need to assess if they can pass these costs on and/or whether this will filter through to the end customer. Temporary relief and longer term commercial arrangements should then be reflected. For example, can price adjustment mechanisms be triggered; can any of these arrangements be terminated/renegotiated? For the medium term, flexibility through this period of uncertainty could be valuable, especially as it remains unclear what trade barriers or importing/exporting duties could be applied in the future. Financial planning is imperative to provide for agility to adapt to any relevant changes which may impact franchise businesses. Transparency of such planning is key, for example, when engaging with prospective franchisees, franchise businesses need to keep in mind the need to avoid misrepresentation. This is even more important, given the Brexit vote, as the impact on franchise funding opportunities is unclear. Although we note that as the time of writing this, franchise lenders such as HSBC, Lloyds, RBS and NatWest have asserted that Brexit will not impact adversely on their lending decision making. Enforcing your franchise agreement - dispute resolution and territory Franchise businesses should consider if Brexit may trigger termination of its franchise agreement for example, by virtue of material adverse change or force majeure. As such, in due course, franchisors should audit their contracts to fully assess the impact of Brexit on its portfolio, if any. Depending on the drafting of the relevant franchise agreement, it may grant rights throughout the EU. When the UK leaves the EU, it could have the (probably unintended) effect of removing the UK from the scope of the agreement. Not only this, franchise businesses operating in more than one jurisdiction should be mindful of the future landscape for cross-border enforcement of judgments in the EU and UK. As legislation governing this area originates from the EU, the UK will need to re-consider the options available to it for example, entering into bilateral/multi-lateral agreements with other countries. Protection of your franchise model - intellectual property rights and trade secrets Brand and know how are important to franchise businesses, however the effect of Brexit for brand owners is unknown at this time and it is unclear whether or not current rights will exist post-Brexit. There is uncertainty for businesses who own EU trade marks (EUTMs) (formerly known as Community trade marks), which may no longer be applicable in the EU or to UK-based owners following Brexit. Businesses that are considering new trade mark applications should consider whether filing for an EUTM is really necessary, or whether a UK registration is actually sufficient. The EU's recent implementation of a new trade secrets Directive may cause concern for franchisors, however the impact of Brexit on trade secrets is likely to be minimal as the UK's current standards are largely the same as the EU's. Operations manuals/handbooks, logos, unregistered trade marks, databases and software constitute valuable rights of any franchisor. The protection of such material, via copyright and cross-border intellectual property protection against infringers, is largely aligned across the EU, but the influence of Brexit on such rights and/or protection is uncertain. Despite the uncertainty, franchisors can be proactive by carrying out health checks of their IP portfolios to ensure that they are in a strong position should changes be made. Franchisors should also ensure their NDA/confidentiality agreements and provisions are reviewed such that they provide sufficient protection for their model. For further consideration of the material issues initiated by Brexit, which could impact franchise businesses, please see our next article 'What does Brexit mean for UK franchising? - part two'. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. ]]>{11EE0B05-1F9F-4CED-A7F3-DC2A64E0C3E7}https://www.shoosmiths.co.uk/news/press-releases/iconix-in-house-senior-counsel-moves-to-shoosmiths-11673.aspxIconix in-house senior counsel moves to Shoosmiths National law firm Shoosmiths has recruited senior in-house lawyer Richard Millington from Iconix Brand Group Inc, to strengthen its technology, media and commercial team. He joins as a partner, based in Shoosmiths' growing Manchester office. Download hi-res image Richard Millington Richard will add his extensive knowledge of structuring commercial deals in the global sports fashion and entertainment markets to help develop the firm's established sports practice, as well as boosting its commercial team in the North West. Richard has worked for 12 years as an in-house lawyer for US listed businesses operating in sportswear, entertainment, retail, technology and marketing. His most recent role was VP International Counsel for Iconix Brand Group, the home of the Umbro, Starter and Peanuts brands. He is also a member of the legal committee of the World Federation for the Sporting Goods Industry. Prior to that, Richard held several senior in-house roles at Nike Inc, including Legal Manager for its Football Business Units, where he advised on Nike's endorsement deal with Manchester United, and General Counsel for Umbro, where he advised on deals with the Football Association, Manchester City and the New York Cosmos amongst others. He has also been involved with many high profile athletic deals for the likes of Joe Hart, Pepe and David Haye and was part of the team that oversaw the sale of the Umbro business to Iconix Brand Group. His appointment will also bring new ideas and commercial insight to Shoosmiths' services for in-house legal teams. Richard has managed legal teams and budgets on a global level, worked with lawyers from the top US firms through to small boutiques, executed strategic corporate and commercial deals and managed tough litigation in many jurisdictions as well as being a strong executive partner. The firm runs a national programme of knowledge events for in-house lawyers, produces a quarterly legislation tracker to help GCs with early awareness of what is on the horizon and earlier this year launched Shoosmiths' Resource Solutions, a suite of four services designed to support the changing needs of in-house legal teams. Commenting on his appointment, Richard said: 'When Shoosmiths approached me I was impressed with their energy and their strategic approach to business. Shoosmiths has a strong reputation amongst in-house legal teams for thinking differently about how to support the challenges which general counsel face. The opportunity to bring my in-house and executive level experience to the firm's clients, particularly those in the sports, retail and creative sectors, and then couple this with the innovative way in which Shoosmiths are thinking about service delivery was a very strong pull.' David Jackson, head of Shoosmiths' technology, media &amp; commercial practice, said: 'Richard is a senior in-house lawyer and an exciting addition to our national team. His commercial insight into the sports sector will help us further develop our work in that industry. In addition to his IP/IT licensing, sponsorship and endorsement expertise, he also brings experience of working on complex cross-border joint ventures, trading networks and IT system deals as well as in-house strategic alignment of legal resources.' Thu, 11 Aug 2016 00:00:00 +0100<![CDATA[Richard Millington ]]><![CDATA[ National law firm Shoosmiths has recruited senior in-house lawyer Richard Millington from Iconix Brand Group Inc, to strengthen its technology, media and commercial team. He joins as a partner, based in Shoosmiths' growing Manchester office. Download hi-res image Richard Millington Richard will add his extensive knowledge of structuring commercial deals in the global sports fashion and entertainment markets to help develop the firm's established sports practice, as well as boosting its commercial team in the North West. Richard has worked for 12 years as an in-house lawyer for US listed businesses operating in sportswear, entertainment, retail, technology and marketing. His most recent role was VP International Counsel for Iconix Brand Group, the home of the Umbro, Starter and Peanuts brands. He is also a member of the legal committee of the World Federation for the Sporting Goods Industry. Prior to that, Richard held several senior in-house roles at Nike Inc, including Legal Manager for its Football Business Units, where he advised on Nike's endorsement deal with Manchester United, and General Counsel for Umbro, where he advised on deals with the Football Association, Manchester City and the New York Cosmos amongst others. He has also been involved with many high profile athletic deals for the likes of Joe Hart, Pepe and David Haye and was part of the team that oversaw the sale of the Umbro business to Iconix Brand Group. His appointment will also bring new ideas and commercial insight to Shoosmiths' services for in-house legal teams. Richard has managed legal teams and budgets on a global level, worked with lawyers from the top US firms through to small boutiques, executed strategic corporate and commercial deals and managed tough litigation in many jurisdictions as well as being a strong executive partner. The firm runs a national programme of knowledge events for in-house lawyers, produces a quarterly legislation tracker to help GCs with early awareness of what is on the horizon and earlier this year launched Shoosmiths' Resource Solutions, a suite of four services designed to support the changing needs of in-house legal teams. Commenting on his appointment, Richard said: 'When Shoosmiths approached me I was impressed with their energy and their strategic approach to business. Shoosmiths has a strong reputation amongst in-house legal teams for thinking differently about how to support the challenges which general counsel face. The opportunity to bring my in-house and executive level experience to the firm's clients, particularly those in the sports, retail and creative sectors, and then couple this with the innovative way in which Shoosmiths are thinking about service delivery was a very strong pull.' David Jackson, head of Shoosmiths' technology, media &amp; commercial practice, said: 'Richard is a senior in-house lawyer and an exciting addition to our national team. His commercial insight into the sports sector will help us further develop our work in that industry. In addition to his IP/IT licensing, sponsorship and endorsement expertise, he also brings experience of working on complex cross-border joint ventures, trading networks and IT system deals as well as in-house strategic alignment of legal resources.' ]]>{9D6EBBF7-5962-4F92-8CCA-298512877C71}https://www.shoosmiths.co.uk/client-resources/legal-updates/is-there-a-future-for-rd-in-post-brexit-britain-11628.aspxIs there a future for R&amp;D in post-Brexit Britain? Since Brexit became a reality Britain has entered a period of unprecedented uncertainty. Each day brings renewed claims that our nation will either be losing out or mining a rich seam of opportunity once we withdraw from the EU. In the days following the referendum it became clear that we had no plan in place to guide us through the economic and political confusion that has become commonplace in the UK. The £350 million a week we were due to save is now understood to be a hypothetical and exaggerated figure. We do not know whether EU nationals currently living in Britain will be permitted to stay here. With the appearance of the #techxit hashtag, which questioned the exit of the tech sector from the UK, our ability to innovate and therefore prosper was thrown into doubt, followed by further questions around whether Britain will suffer a 'brain drain' in a gusty loss of talent. This week Sir Prof Venki Ramakrishnan, President of The Royal Society, spoke out about the uncertainty of scientific research in post-Brexit Britain. He voiced pervasive concerns that UK researchers are already being overlooked by EU collaborators due to financial uncertainty, and that EU researchers based in the UK need assurances from Government that they will be able to remain here indefinitely. In a joint statement, a number of Academies, including the Academy of Medical Sciences, the British Academy, the Royal Academy of Engineering and the Royal Society, claimed that uncertainty following the vote is already having an impact on research and innovation. This throws into question whether world class research will continue to "endure" as Science Minister Jo Johnson has suggested. So what are the real implications for the Research and Development sector, an area which has received roughly £1bn in EU funds per annum over the last ten years? How well positioned will we be to bolster our renowned reputation as a leading global R&amp;D contender in post-Brexit Britain? Increased flexibility In the lead up to the referendum concerns were raised across the tech, research and education sectors, bolstered by reports from The Royal Society and Digital Science citing the importance of EU financial support, as well as the collaborative benefits of membership. On the other side of the debate, however, Brexit garnered support from innovation and manufacturing heavyweights like Dyson and JCB. Lord Bamford, chairman of JCB, asserted that, as one of the largest global economies, the UK has little to fear going forward. Both he and Sir James Dyson have referred to an increased flexibility afforded by the removal of EU legislation resulting in the reduction of costs of bureaucracy itself, enabling UK businesses to trade more freely with non-EU countries. Dyson also voiced frustration with free movement within the EU for complicating procedures surrounding the employment of non-EU researchers and engineers, claiming this jeopardises the UK's innovation landscape. It is unclear whether these views are based on an objective view of the debate or on personal opinion. However, they come as a sharp contrast to the widespread fears that increased border control may harm the attraction of top EU talent to our research-focussed companies and universities. Professor Angus Dalgleish, Foundation Professor of Oncology at St Georges University of London argues that, instead of turning them away, Brexit will, in fact, allow Universities to be freely able to 'attract and recruit the finest minds from across the planet' and it is these students who will 'prove to be the entrepreneurs and employers of the future'. Graeme Reid, chair of science and research policy at University College London has written that 'leaving the EU does not mean an end of this quality, but it requires profound changes in the practicalities behind it.' Internal investment A key funding issue is the allocation of the £13bn per year that will no longer be invested in EU membership. A report published in May by research-focussed tech company Digital Science stressed the importance of using these funds to alleviate the shortfalls created by Brexit in areas such as R&amp;D. In a country that has increased its dependency on EU support by contributing as little as 1.63% of its GDP to research, this will be a vital step to stabilising the innovation sector in the coming years. Private sector investment has also been notably low in the UK, with British companies contributing as little as 1.06% of GDP to R&amp;D (almost 80% lower than businesses in Germany). If we are able to form a strategy which incorporates and addresses these issues before our exit from the Union, then the future of R&amp;D in the UK will benefit hugely. Startups and innovation Only two years ago, the UK was the number one destination in the EU for foreign investment from the likes of USA and India. The type of membership the UK Government negotiates with the EU going forward will therefore determine whether some foreign investors continue to seek those opportunities in the UK. A report in The Hindu newspaper highlights the tone of optimism in the Indian circles. An SBI report, for instance, mentions, 'This referendum will have geopolitical implications and will affect the relation of the rest of the world with Europe. But, our take is that though such an exit brings up a lot of uncertainty within Europe, it definitely opens up opportunities for India'. Could Brexit mean a new and exciting future for innovation and investment from non-EU emerging markets? The consensus is that positive action is the best way to navigate the current slough of economic uncertainty. Since the referendum it has been reported that nine key SME trade bodies, including the Federation of Small Businesses and Enterprise Nation are set to join forces in order to maximise their ability to support small and medium sized businesses. The overriding message of the collective is that optimism is crucial, with a strong focus on seeking fresh new global trade arrangements and cutting down on unnecessary regulation. Associate membership Of course, securing EU funding is not off the table for countries without full membership. We need look no further than Norway to see that negotiating for associate member status would leave us open to financial support as well as collaborative opportunities in ground-breaking future projects. In the last ten years Norway has received just under £900m in research funding. Although this is a small percentage of the funds allocated to the UK in the same timeframe, we must remind ourselves that Norway has a current population of 5.3 million; a mere fraction of our own headcount of 65.1 million. The caveat, however, is that Norway's EU deal involves compliance with various regulations which leave the country with no say in the future development of European R&amp;D. Additionally, some of these regulations, such as contributing to the budget and free movement of labour, formed the backbone of the Leave campaign and are unlikely to resonate with disaffected Leave voters. Striking a balance between accessing financial and collaborative benefits and establishing independent UK policy on free movement and trade will be a huge consideration in ongoing negotiations. Horizon 2020, the far-reaching and ambitious EU research and innovation funding programme which launched in 2014, is open to associated countries as well as member states. Despite science minister Jo Johnson's promises to scrutinise evidence of political discrimination in the research sector there is little to be done to reassure companies and academics, both here and abroad, about the reliability of European funding models either now or in the years to come. As the UK and EU await each of our fates and those in power deliberate over how the UK will renegotiate its position, it is clear that public, private and voluntary sectors will need to co-operate to strengthen the UK's R&amp;D position and mitigate any potential damage to its reputation and the R&amp;D sector in general by seeking any path by which pan-European research continues. However the UK decides to proceed, sectors such as technology and science need access to global markets and will increasingly need to work without borders given the rapid evolution in technology and innovation. Ultimately, the future of R&amp;D hangs in the balance awaiting news on the future of the UK's relationship with the EU. Given the current state of affairs, who knows where the political yellow brick road will lead us. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Tue, 02 Aug 2016 00:00:00 +0100<![CDATA[Priti Bansel-Branch ]]><![CDATA[ Since Brexit became a reality Britain has entered a period of unprecedented uncertainty. Each day brings renewed claims that our nation will either be losing out or mining a rich seam of opportunity once we withdraw from the EU. In the days following the referendum it became clear that we had no plan in place to guide us through the economic and political confusion that has become commonplace in the UK. The £350 million a week we were due to save is now understood to be a hypothetical and exaggerated figure. We do not know whether EU nationals currently living in Britain will be permitted to stay here. With the appearance of the #techxit hashtag, which questioned the exit of the tech sector from the UK, our ability to innovate and therefore prosper was thrown into doubt, followed by further questions around whether Britain will suffer a 'brain drain' in a gusty loss of talent. This week Sir Prof Venki Ramakrishnan, President of The Royal Society, spoke out about the uncertainty of scientific research in post-Brexit Britain. He voiced pervasive concerns that UK researchers are already being overlooked by EU collaborators due to financial uncertainty, and that EU researchers based in the UK need assurances from Government that they will be able to remain here indefinitely. In a joint statement, a number of Academies, including the Academy of Medical Sciences, the British Academy, the Royal Academy of Engineering and the Royal Society, claimed that uncertainty following the vote is already having an impact on research and innovation. This throws into question whether world class research will continue to "endure" as Science Minister Jo Johnson has suggested. So what are the real implications for the Research and Development sector, an area which has received roughly £1bn in EU funds per annum over the last ten years? How well positioned will we be to bolster our renowned reputation as a leading global R&amp;D contender in post-Brexit Britain? Increased flexibility In the lead up to the referendum concerns were raised across the tech, research and education sectors, bolstered by reports from The Royal Society and Digital Science citing the importance of EU financial support, as well as the collaborative benefits of membership. On the other side of the debate, however, Brexit garnered support from innovation and manufacturing heavyweights like Dyson and JCB. Lord Bamford, chairman of JCB, asserted that, as one of the largest global economies, the UK has little to fear going forward. Both he and Sir James Dyson have referred to an increased flexibility afforded by the removal of EU legislation resulting in the reduction of costs of bureaucracy itself, enabling UK businesses to trade more freely with non-EU countries. Dyson also voiced frustration with free movement within the EU for complicating procedures surrounding the employment of non-EU researchers and engineers, claiming this jeopardises the UK's innovation landscape. It is unclear whether these views are based on an objective view of the debate or on personal opinion. However, they come as a sharp contrast to the widespread fears that increased border control may harm the attraction of top EU talent to our research-focussed companies and universities. Professor Angus Dalgleish, Foundation Professor of Oncology at St Georges University of London argues that, instead of turning them away, Brexit will, in fact, allow Universities to be freely able to 'attract and recruit the finest minds from across the planet' and it is these students who will 'prove to be the entrepreneurs and employers of the future'. Graeme Reid, chair of science and research policy at University College London has written that 'leaving the EU does not mean an end of this quality, but it requires profound changes in the practicalities behind it.' Internal investment A key funding issue is the allocation of the £13bn per year that will no longer be invested in EU membership. A report published in May by research-focussed tech company Digital Science stressed the importance of using these funds to alleviate the shortfalls created by Brexit in areas such as R&amp;D. In a country that has increased its dependency on EU support by contributing as little as 1.63% of its GDP to research, this will be a vital step to stabilising the innovation sector in the coming years. Private sector investment has also been notably low in the UK, with British companies contributing as little as 1.06% of GDP to R&amp;D (almost 80% lower than businesses in Germany). If we are able to form a strategy which incorporates and addresses these issues before our exit from the Union, then the future of R&amp;D in the UK will benefit hugely. Startups and innovation Only two years ago, the UK was the number one destination in the EU for foreign investment from the likes of USA and India. The type of membership the UK Government negotiates with the EU going forward will therefore determine whether some foreign investors continue to seek those opportunities in the UK. A report in The Hindu newspaper highlights the tone of optimism in the Indian circles. An SBI report, for instance, mentions, 'This referendum will have geopolitical implications and will affect the relation of the rest of the world with Europe. But, our take is that though such an exit brings up a lot of uncertainty within Europe, it definitely opens up opportunities for India'. Could Brexit mean a new and exciting future for innovation and investment from non-EU emerging markets? The consensus is that positive action is the best way to navigate the current slough of economic uncertainty. Since the referendum it has been reported that nine key SME trade bodies, including the Federation of Small Businesses and Enterprise Nation are set to join forces in order to maximise their ability to support small and medium sized businesses. The overriding message of the collective is that optimism is crucial, with a strong focus on seeking fresh new global trade arrangements and cutting down on unnecessary regulation. Associate membership Of course, securing EU funding is not off the table for countries without full membership. We need look no further than Norway to see that negotiating for associate member status would leave us open to financial support as well as collaborative opportunities in ground-breaking future projects. In the last ten years Norway has received just under £900m in research funding. Although this is a small percentage of the funds allocated to the UK in the same timeframe, we must remind ourselves that Norway has a current population of 5.3 million; a mere fraction of our own headcount of 65.1 million. The caveat, however, is that Norway's EU deal involves compliance with various regulations which leave the country with no say in the future development of European R&amp;D. Additionally, some of these regulations, such as contributing to the budget and free movement of labour, formed the backbone of the Leave campaign and are unlikely to resonate with disaffected Leave voters. Striking a balance between accessing financial and collaborative benefits and establishing independent UK policy on free movement and trade will be a huge consideration in ongoing negotiations. Horizon 2020, the far-reaching and ambitious EU research and innovation funding programme which launched in 2014, is open to associated countries as well as member states. Despite science minister Jo Johnson's promises to scrutinise evidence of political discrimination in the research sector there is little to be done to reassure companies and academics, both here and abroad, about the reliability of European funding models either now or in the years to come. As the UK and EU await each of our fates and those in power deliberate over how the UK will renegotiate its position, it is clear that public, private and voluntary sectors will need to co-operate to strengthen the UK's R&amp;D position and mitigate any potential damage to its reputation and the R&amp;D sector in general by seeking any path by which pan-European research continues. However the UK decides to proceed, sectors such as technology and science need access to global markets and will increasingly need to work without borders given the rapid evolution in technology and innovation. Ultimately, the future of R&amp;D hangs in the balance awaiting news on the future of the UK's relationship with the EU. Given the current state of affairs, who knows where the political yellow brick road will lead us. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. ]]>{9D6E561D-304A-421B-AD29-F03DED4F9279}https://www.shoosmiths.co.uk/client-resources/legal-updates/commercial-agents-regulations-1993-11587.aspxMoving with the Times - the Commercial Agents Regulations 1993 A recent High Court decision has confirmed that the supply or sale of software constitutes a sale of goods for the purposes of the Commercial Agents (Council Directive) Regulations 1993 (SI 1993/3053) (the Regulations). Until this decision, only software bundled with hardware was deemed to be goods. The case - The Software Incubator Ltd v Computer Associates Ltd [2016] EWHC 1587 (QB) - brings welcome certainty on this point and shines a light on the Regulations, which despite the significant rights they confer, often go unconsidered before entering into agency arrangements. The ruling provides a useful opportunity to take a look at the application of the Regulations and some of the key provisions and for software licensors using agents to promote or sell their products to familiarise themselves with the Regulations, especially since many cannot be contracted out of. The background The Regulations were implemented in the UK on 1 January 1994 (pursuant to EC Directive 86/653/EC (Directive)) to bolster a commercial agent's contractual position due to the perceived imbalance of power between a commercial agent and that of their principal. The Regulations define a commercial agent as a self-employed intermediary (which subsequent case law has confirmed can mean an individual, a partnership or a company) who has continuing authority to negotiate (and in some cases conclude) the sale or purchase of 'goods', on behalf of or in the name of, another person. The definition of goods (or lack thereof) Absent of a definition in the Regulations, what constitutes 'goods' has been the subject of some debate. At the time the Regulations came into force, the DTI's (now BIS) accompanying guidance provided that the definition of goods at s61 of the Sale of Goods Act 1979 (SGA) was a reasonable guide without being determinative. This approach however raised two main issues in respect of software: The definition of 'goods' under the SGA refers to 'chattels' and therefore infers that goods must be tangible in nature, which, unless bundled with hardware, software is not; and The Regulations refer to a sale or purchase, namely the transfer of title between a seller and a buyer, and software is customarily licensed (albeit often on a perpetual basis), not sold. In coming to his decision, Waksman J addressed such issues and made the following observations: Although software cannot be physically handled or transported, its effects can be likened to gas and electricity (which previous case law has held to constitute goods); The software in question was 'commodified' meaning it was capable of transfer and commercial exploitation; While software itself is intangible, it can only operate in a tangible environment; and The sale of goods should not exclude the supply of software just because the ownership of the IP rights in the software will not usually be transferred absolutely (ie by way of assignment). Payments on termination The case also looked at whether the claimant was entitled to a compensation payment on termination of the agency agreement. Such payments are a key tenet of the Regulations and we look at them in more detail below. The general rule under the Regulations is that, subject to some exceptions (see below), if the principal terminates an agency agreement, the agent is entitled to receive a compensation or indemnity payment in recognition of the goodwill and business the agent has built up. This cannot be contracted out of to the agent's detriment. Unless the contract says otherwise, an agent is entitled to compensation rather than an indemnity payment. The agent is required to give their principal notice of their intention to claim this payment within one year of termination. The payment may not be payable where the agent is in serious breach of the agreement or where the agent is terminating the agency agreement for convenience. If however the agent is terminating the agreement due to the end of a fixed term contract, the principal's serious breach or their retirement, ill-health or death, the compensation/ indemnity payment will be due. The basis upon which such payments are calculated is summarised below: Compensation Indemnity The amount of compensation is worked out by calculating the value of the agent's business and goodwill (or part being terminated) at the date of termination. The purpose is to compensate the agent for the loss it will suffer as a result of the end of its relationship with the principal. There is no maximum cap. The maximum that can be awarded is one years' remuneration based on the average of the agent's earning over the past five years (or, if the contract for less than five years, over that shorter period). While the indemnity appears to provide greater certainty, the payment of the indemnity does not prevent an agent from seeking damages for loss it has suffered. Other strict provisions In addition to a payment on termination, below is a summary of some of the other key provisions that cannot be opted out of to the agent's detriment: Provision Details Long-stop date for payment of commission Any commission due must be paid to the agent, at the latest, on the last day of the month following the quarter in which it became due. Commission statement &amp; information The principal must supply the agent with a statement of commission by the last day on the month following the quarter when commission became due. The agent is entitled to all information necessary to check commission. Minimum notice periods Each party must observe the following notice periods and cannot agree a shorter period: one month for the 1st year of the contract; two months once the 2nd year of the contract has commenced; and three months once the 3rd year of the contract has commenced and for subsequent years of the contract. Where a longer period is agreed, the period of notice to be observed by the principal must not be shorter than that to be observed by the agent. Good faith Both parties must act dutifully and in good faith. Conclusion The case is a good example of how the courts must interpret laws in light of technology not envisaged at the time of its inception, but also of the wider challenge the legislature faces in keeping up to speed with the increasingly digitised environment in which we work. Following the UK's vote to leave the EU, it is difficult not to reflect on the genesis of the Regulations. Of course, the effect of Brexit on our laws with European origins is uncertain. Just a few weeks ago the repeal of or significant amendment to legislation so embedded in the UK's legal and commercial landscape would have seemed most unlikely yet now, what is certain is that, just as the courts have been doing, we will be moving with the times. For more information on this article, please contact Hannah Mitchell. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.Mon, 25 Jul 2016 00:00:00 +0100<![CDATA[Simon Edwards ]]><![CDATA[ A recent High Court decision has confirmed that the supply or sale of software constitutes a sale of goods for the purposes of the Commercial Agents (Council Directive) Regulations 1993 (SI 1993/3053) (the Regulations). Until this decision, only software bundled with hardware was deemed to be goods. The case - The Software Incubator Ltd v Computer Associates Ltd [2016] EWHC 1587 (QB) - brings welcome certainty on this point and shines a light on the Regulations, which despite the significant rights they confer, often go unconsidered before entering into agency arrangements. The ruling provides a useful opportunity to take a look at the application of the Regulations and some of the key provisions and for software licensors using agents to promote or sell their products to familiarise themselves with the Regulations, especially since many cannot be contracted out of. The background The Regulations were implemented in the UK on 1 January 1994 (pursuant to EC Directive 86/653/EC (Directive)) to bolster a commercial agent's contractual position due to the perceived imbalance of power between a commercial agent and that of their principal. The Regulations define a commercial agent as a self-employed intermediary (which subsequent case law has confirmed can mean an individual, a partnership or a company) who has continuing authority to negotiate (and in some cases conclude) the sale or purchase of 'goods', on behalf of or in the name of, another person. The definition of goods (or lack thereof) Absent of a definition in the Regulations, what constitutes 'goods' has been the subject of some debate. At the time the Regulations came into force, the DTI's (now BIS) accompanying guidance provided that the definition of goods at s61 of the Sale of Goods Act 1979 (SGA) was a reasonable guide without being determinative. This approach however raised two main issues in respect of software: The definition of 'goods' under the SGA refers to 'chattels' and therefore infers that goods must be tangible in nature, which, unless bundled with hardware, software is not; and The Regulations refer to a sale or purchase, namely the transfer of title between a seller and a buyer, and software is customarily licensed (albeit often on a perpetual basis), not sold. In coming to his decision, Waksman J addressed such issues and made the following observations: Although software cannot be physically handled or transported, its effects can be likened to gas and electricity (which previous case law has held to constitute goods); The software in question was 'commodified' meaning it was capable of transfer and commercial exploitation; While software itself is intangible, it can only operate in a tangible environment; and The sale of goods should not exclude the supply of software just because the ownership of the IP rights in the software will not usually be transferred absolutely (ie by way of assignment). Payments on termination The case also looked at whether the claimant was entitled to a compensation payment on termination of the agency agreement. Such payments are a key tenet of the Regulations and we look at them in more detail below. The general rule under the Regulations is that, subject to some exceptions (see below), if the principal terminates an agency agreement, the agent is entitled to receive a compensation or indemnity payment in recognition of the goodwill and business the agent has built up. This cannot be contracted out of to the agent's detriment. Unless the contract says otherwise, an agent is entitled to compensation rather than an indemnity payment. The agent is required to give their principal notice of their intention to claim this payment within one year of termination. The payment may not be payable where the agent is in serious breach of the agreement or where the agent is terminating the agency agreement for convenience. If however the agent is terminating the agreement due to the end of a fixed term contract, the principal's serious breach or their retirement, ill-health or death, the compensation/ indemnity payment will be due. The basis upon which such payments are calculated is summarised below: Compensation Indemnity The amount of compensation is worked out by calculating the value of the agent's business and goodwill (or part being terminated) at the date of termination. The purpose is to compensate the agent for the loss it will suffer as a result of the end of its relationship with the principal. There is no maximum cap. The maximum that can be awarded is one years' remuneration based on the average of the agent's earning over the past five years (or, if the contract for less than five years, over that shorter period). While the indemnity appears to provide greater certainty, the payment of the indemnity does not prevent an agent from seeking damages for loss it has suffered. Other strict provisions In addition to a payment on termination, below is a summary of some of the other key provisions that cannot be opted out of to the agent's detriment: Provision Details Long-stop date for payment of commission Any commission due must be paid to the agent, at the latest, on the last day of the month following the quarter in which it became due. Commission statement &amp; information The principal must supply the agent with a statement of commission by the last day on the month following the quarter when commission became due. The agent is entitled to all information necessary to check commission. Minimum notice periods Each party must observe the following notice periods and cannot agree a shorter period: one month for the 1st year of the contract; two months once the 2nd year of the contract has commenced; and three months once the 3rd year of the contract has commenced and for subsequent years of the contract. Where a longer period is agreed, the period of notice to be observed by the principal must not be shorter than that to be observed by the agent. Good faith Both parties must act dutifully and in good faith. Conclusion The case is a good example of how the courts must interpret laws in light of technology not envisaged at the time of its inception, but also of the wider challenge the legislature faces in keeping up to speed with the increasingly digitised environment in which we work. Following the UK's vote to leave the EU, it is difficult not to reflect on the genesis of the Regulations. Of course, the effect of Brexit on our laws with European origins is uncertain. Just a few weeks ago the repeal of or significant amendment to legislation so embedded in the UK's legal and commercial landscape would have seemed most unlikely yet now, what is certain is that, just as the courts have been doing, we will be moving with the times. For more information on this article, please contact Hannah Mitchell. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.]]>{9E1E4413-C176-4B7B-92E7-142FB5B0C264}https://www.shoosmiths.co.uk/news/press-releases/11454.aspxEU Referendum result: Shoosmiths experts comment Shoosmiths' experts in competition, employment, real estate, corporate and commercial comment on the EU referendum result. Competition Law Simon Barnes, head of EU and competition at Shoosmiths The UK's competition laws mirror that of the EU's, therefore the vote to leave should in principle have very little, if any, effect on the competition law assessment of commercial agreements. The leave vote could see changes in how competition law applies to certain types of commercial arrangement, such as distribution and licensing agreements, as the current rules come from the European Commission block exemption regulations and guidelines. These could be discarded now that we have opted out of the EU. Disparities between the UK and EU's competition laws may emerge in the long term when differences in levels of enforcement and court judgements become apparent. Should the EU guidance be repealed, both the lawfulness of commercial arrangements and the compliance to varying rules in different jurisdictions will be a concern for businesses. The EU Merger Regulation will now cease to apply with deals in future potentially having to be reviewed under both the Merger Regulation and the UK's domestic merger rules. Control of State aid can now be retained by the UK, possibly allowing the UK to benefit from public support by way of grants and favourable tax regimes. However, respecting the existing EU rules on this may prove crucial in securing access to the EU single market. Similarly the existing public procurement regime will most likely stay put to promote competitiveness in public tender processes and act as a tool in negotiating single market access. Employment Law Charles Rae, employment partner at Shoosmiths Now that the UK has voted to leave the EU, once Brexit is completed the Government could in theory decide to repeal or revise a significant proportion of the UK's employment laws, where these are laws that are required as part of the UK's membership of the EU. A number of employment laws fall into this category, such as many of the anti-discrimination rights, transfer of undertakings regulations, family leave entitlements, collective consultation obligations, duties to agency workers or working time regulations. However, any kind of wholesale change seems unlikely for a number of reasons. Many of the laws in question have become so ingrained within UK businesses that it seems unlikely the Government would take steps to significantly change or remove them, especially where they provide rights to employees that have become widely accepted and valued. Moreover, much of the UK's employment legislation pre-dates the EU imposed ones, and have instead been built upon by later EU requirements, so the foundations are already in place. For instance, the UK already had race and disability discrimination rules before the EU wide requirements were introduced. Many feel that more likely than repealing laws, the Government would take the opportunity to smooth off some of the less popular requirements set down by the EU, for example restrictions on changing terms and conditions following a TUPE transfer. We may also find that freedom of movement within the EU leaves uncertainty as to the status of EU nationals who already work in the UK (and vice versa). Many businesses rely on EU workers and will want to be satisfied that their right to remain in the UK (and to therefore provide their services) is not going to be adversely affected. Equally, it isn't clear what a Brexit will mean for EU nationals currently working in the UK. Many potential solutions have been mooted, such as a compromise that would see current EU migrants given a set period of time to remain in the UK during which they can apply for citizenship, in return for UK citizens currently abroad to remain where they are on the same basis. Real Estate Simon Boss, real estate partner at Shoosmiths Given that the commercial real estate deals flow has already been impacted by the uncertainty that abounded in the run up to the referendum, we may see some clients putting deals on hold in the wake of the leave result. Equally, we may see some pick up in transactions as some investors look to reduce their exposure to the UK market. For some funds and investors this may present an opportunity to acquire at an attractive price. Since its creation, no Member State has ever left the European Union so we have no clear precedent in regards to what happens next and this is as much the case for the real estate sector as it is for the wider commercial arena. Withdrawal from the EU could have major implications for the construction industry, which is already tackling a labour shortage. Tightened immigration control could now exacerbate this issue, given that a large percentage of EU immigrants work in the construction sector. What many will be waiting most anxiously to determine though is how far foreign investment into British real estate will be impacted by our withdrawal from the EU. Will the position of Britain as a primary choice for commercial real estate investment in Europe suffer? Until some certainty returns to the market, this could well reduce the UK's reputation as a safe haven for real estate investment. Corporate - Private Equity Kieran Toal, corporate partner at Shoosmiths We're now in uncharted waters - no member state has left the EU since its inception and how the economy and UK businesses will fare is hard to predict. However in terms of the Private Equity market, we are dealing with the relative unknown, but investors still need to invest. Admittedly there may be a slow start while buyers take stock but, once the wheels begin to turn, there is a plethora of cash-rich private equity houses with capital to invest and UK businesses with rich growth potential aren't going to lose their appeal overnight. There may well be a shift in focus, with businesses which are particularly reliant on European markets becoming less attractive propositions. But for the most part, likelihood is that the inertia caused by uncertainty over the vote will slowly lift. Commercial - Creative industries Laura Harper, partner in the national Intellectual Property &amp; Creative Industries group and head of the IP &amp; Creative Industries at Shoosmiths I think there is going to be concern and disappointment in the creative industries at this outcome. There are many questions that will have to be answered around funding, free movement of people and collaboration across film, television and the performing arts. Certainly it's no exaggeration to say regulation around Trade Mark protection is going to need redrafting creating uncertainty for companies here and abroad who own EU Trade Marks. The 'out' vote means there is going to have to be a transitional period where companies who have an EU Trade Mark will potentially lose protection in the UK and they will need to audit their TM portfolios to identify the areas which will require attention to ensure they apply for the necessary national coverage. As legal advisers we will provide advice on the basis that UK protection under EU trade marks will be eventually lost until we receive clarity on the transitional provisions to ensure that our clients' interests are fully protected. The patent system has taken decades to negotiate - the Unified Patent and Unified Patent Court was due to be implemented in 2017. With this vote this will probably be delayed and add an extra layer of process to the new Unified Patent and Court procedure.Fri, 24 Jun 2016 00:00:00 +0100<![CDATA[ Shoosmiths' experts in competition, employment, real estate, corporate and commercial comment on the EU referendum result. Competition Law Simon Barnes, head of EU and competition at Shoosmiths The UK's competition laws mirror that of the EU's, therefore the vote to leave should in principle have very little, if any, effect on the competition law assessment of commercial agreements. The leave vote could see changes in how competition law applies to certain types of commercial arrangement, such as distribution and licensing agreements, as the current rules come from the European Commission block exemption regulations and guidelines. These could be discarded now that we have opted out of the EU. Disparities between the UK and EU's competition laws may emerge in the long term when differences in levels of enforcement and court judgements become apparent. Should the EU guidance be repealed, both the lawfulness of commercial arrangements and the compliance to varying rules in different jurisdictions will be a concern for businesses. The EU Merger Regulation will now cease to apply with deals in future potentially having to be reviewed under both the Merger Regulation and the UK's domestic merger rules. Control of State aid can now be retained by the UK, possibly allowing the UK to benefit from public support by way of grants and favourable tax regimes. However, respecting the existing EU rules on this may prove crucial in securing access to the EU single market. Similarly the existing public procurement regime will most likely stay put to promote competitiveness in public tender processes and act as a tool in negotiating single market access. Employment Law Charles Rae, employment partner at Shoosmiths Now that the UK has voted to leave the EU, once Brexit is completed the Government could in theory decide to repeal or revise a significant proportion of the UK's employment laws, where these are laws that are required as part of the UK's membership of the EU. A number of employment laws fall into this category, such as many of the anti-discrimination rights, transfer of undertakings regulations, family leave entitlements, collective consultation obligations, duties to agency workers or working time regulations. However, any kind of wholesale change seems unlikely for a number of reasons. Many of the laws in question have become so ingrained within UK businesses that it seems unlikely the Government would take steps to significantly change or remove them, especially where they provide rights to employees that have become widely accepted and valued. Moreover, much of the UK's employment legislation pre-dates the EU imposed ones, and have instead been built upon by later EU requirements, so the foundations are already in place. For instance, the UK already had race and disability discrimination rules before the EU wide requirements were introduced. Many feel that more likely than repealing laws, the Government would take the opportunity to smooth off some of the less popular requirements set down by the EU, for example restrictions on changing terms and conditions following a TUPE transfer. We may also find that freedom of movement within the EU leaves uncertainty as to the status of EU nationals who already work in the UK (and vice versa). Many businesses rely on EU workers and will want to be satisfied that their right to remain in the UK (and to therefore provide their services) is not going to be adversely affected. Equally, it isn't clear what a Brexit will mean for EU nationals currently working in the UK. Many potential solutions have been mooted, such as a compromise that would see current EU migrants given a set period of time to remain in the UK during which they can apply for citizenship, in return for UK citizens currently abroad to remain where they are on the same basis. Real Estate Simon Boss, real estate partner at Shoosmiths Given that the commercial real estate deals flow has already been impacted by the uncertainty that abounded in the run up to the referendum, we may see some clients putting deals on hold in the wake of the leave result. Equally, we may see some pick up in transactions as some investors look to reduce their exposure to the UK market. For some funds and investors this may present an opportunity to acquire at an attractive price. Since its creation, no Member State has ever left the European Union so we have no clear precedent in regards to what happens next and this is as much the case for the real estate sector as it is for the wider commercial arena. Withdrawal from the EU could have major implications for the construction industry, which is already tackling a labour shortage. Tightened immigration control could now exacerbate this issue, given that a large percentage of EU immigrants work in the construction sector. What many will be waiting most anxiously to determine though is how far foreign investment into British real estate will be impacted by our withdrawal from the EU. Will the position of Britain as a primary choice for commercial real estate investment in Europe suffer? Until some certainty returns to the market, this could well reduce the UK's reputation as a safe haven for real estate investment. Corporate - Private Equity Kieran Toal, corporate partner at Shoosmiths We're now in uncharted waters - no member state has left the EU since its inception and how the economy and UK businesses will fare is hard to predict. However in terms of the Private Equity market, we are dealing with the relative unknown, but investors still need to invest. Admittedly there may be a slow start while buyers take stock but, once the wheels begin to turn, there is a plethora of cash-rich private equity houses with capital to invest and UK businesses with rich growth potential aren't going to lose their appeal overnight. There may well be a shift in focus, with businesses which are particularly reliant on European markets becoming less attractive propositions. But for the most part, likelihood is that the inertia caused by uncertainty over the vote will slowly lift. Commercial - Creative industries Laura Harper, partner in the national Intellectual Property &amp; Creative Industries group and head of the IP &amp; Creative Industries at Shoosmiths I think there is going to be concern and disappointment in the creative industries at this outcome. There are many questions that will have to be answered around funding, free movement of people and collaboration across film, television and the performing arts. Certainly it's no exaggeration to say regulation around Trade Mark protection is going to need redrafting creating uncertainty for companies here and abroad who own EU Trade Marks. The 'out' vote means there is going to have to be a transitional period where companies who have an EU Trade Mark will potentially lose protection in the UK and they will need to audit their TM portfolios to identify the areas which will require attention to ensure they apply for the necessary national coverage. As legal advisers we will provide advice on the basis that UK protection under EU trade marks will be eventually lost until we receive clarity on the transitional provisions to ensure that our clients' interests are fully protected. The patent system has taken decades to negotiate - the Unified Patent and Unified Patent Court was due to be implemented in 2017. With this vote this will probably be delayed and add an extra layer of process to the new Unified Patent and Court procedure.]]>{DE45E47C-8669-47B4-A8FC-9CF41EC13F81}https://www.shoosmiths.co.uk/client-resources/legal-updates/fintech-update-who-can-stop-the-blockchain-train-11413.aspxFinTech Update: Who can stop the blockchain train? The benefits and also the malevolent use of the Bitcoin peer-to-peer crypto-currency is rarely out of the news. Recent press coverage around the most recent individual's claim to be the creator of Bitcoin, Satoshi Nakamato, once again highlights the mystery and intrigue around the development of Bitcoin. However, big business has woken up to the potential value of blockchain, the distributed ledger technology underpinning Bitcoin that has the potential to revolutionise global commerce. Larry Summers, the former US Treasury Secretary, has recently stated that the use of blockchain is 'overwhelmingly likely' to change the financial industry. It is suggested that over a billion US dollars have been invested in blockchain start-ups, reflecting the potential market seen by investors. Here in the UK, the use of third party intermediary clearing houses is ingrained in our financial service systems. Services such as the CHAPS payment system, providing same day bank transfers, the more recently launched Faster Payments Scheme, providing real time interbank payments for low value transaction, the use of card scheme-backed payment cards, such as VISA and Mastercard, and the trading of shares via the London Stock Exchange, all involve the use of a clearing house to seek to identify the transacting parties and minimise fraud. The use of clearing houses carries an administrative overhead and an associated cost. For example, a CHAPS payment will typically incur a £35 charge and a credit card payment will cost the retailer several per cent of the transaction value, a cost which is ultimately passed to the consumer. The key benefit of blockchain technology is that it enables two parties to transact directly with each other without the involvement of the third party intermediary, saving time and cost and therefore making micro payments much more viable. While the card schemes and merchant acquirers have been offering lower transaction charges for contactless payments in order to accelerate adoption of the technology, the use of blockchain technology to support peer-to-peer transactions must give the card schemes significant cause for concern. Indeed, whilst card schemes are quick to highlight the potential weaknesses of blockchain, the card schemes are also exploring how the technology can be used to support the remittances business. A further benefit of blockchain is the distributed ledger technology provides an indestructible digital record of actions. A helpful analogy used by others is that blockchain is like a beaded necklace, each bead (or 'block') is a record of an action (whether a payment or otherwise) and that action is proven by the beads immediately before and after it. Within the payments industry, blockchain effectively proves where the money came from and where it has gone to (albeit the identity of the individuals who have received and sent payment can be hidden, hence the use of Bitcoin for illegal activities such as the well known "Silk Road" online black market). As the ledger of transactions is distributed in duplicate to the computers of users around the world and updating in real time, that ledger is not susceptible to attack in the same way as a single ledger held by a single institution. Blockchain can be used not only for digital currency, such as Bitcoin, but also to enable individuals to verify their identity by capturing information such as the individual's birth certificate, National Insurance number, passport details, driver's licence and other pertinent information to enable the individual to create a Legal Entity Identifier (LEI) to readily prove their identity, dramatically speeding up the "know your customer" and anti-money laundering identification checks, so that signing up for financial products can be much more straightforward. This also strengthens the enforceability of electronic signatures, an increasingly important process in our digital world. Whilst the press have readily leapt on stories showing the use of blockchain technology for illegal purposes (such as the use of Bitcoin on the Silk Road), there are many possibilities for using this technology for positive socio-economic benefit. Being able to prove your identity using blockchain could make significant inroads into getting the 'unbanked banked'. Immigration is a key issue facing Europe at present and getting immigrants housed, into work and integrated into modern life, including obtaining a bank account, could be made so much more straightforward if the individual has a personal blockchain to prove that individual's identity. Only a few weeks ago, BlockCrushr Labs also unveiled a solution using blockchain technologies to ensure that funds given to buy meals and other necessities are spent for their intended purpose. The solution addresses the reduction in the number of people who carry cash, by allowing people to anonymously load "digital food wallets" of homeless people through common payment methods such as smartphones, credit cards and Paypal. The "smart wallets" can be spent securely at participating food retailers. On a less serious note, blockchain is triggering the proliferation of digital currency such as the recent launch of 'Sweatcoins' awarded using an iPhone app to track the user's steps. Reminiscent of the introduction of in-car telematics to reduce car insurance premiums, Sweatcoin's co-founder is in talks with health insurers about using Sweatcoin stats to calculate health risks for policy premiums. Whilst blockchain technology may not be straightforward for the consumer to understand, the resulting convenience and ease of use means that mainstream adoption can only be a matter of time. Stay on that station platform, the blockchain train is arriving soon. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Thu, 09 Jun 2016 00:00:00 +0100<![CDATA[Craig Armstrong ]]><![CDATA[ The benefits and also the malevolent use of the Bitcoin peer-to-peer crypto-currency is rarely out of the news. Recent press coverage around the most recent individual's claim to be the creator of Bitcoin, Satoshi Nakamato, once again highlights the mystery and intrigue around the development of Bitcoin. However, big business has woken up to the potential value of blockchain, the distributed ledger technology underpinning Bitcoin that has the potential to revolutionise global commerce. Larry Summers, the former US Treasury Secretary, has recently stated that the use of blockchain is 'overwhelmingly likely' to change the financial industry. It is suggested that over a billion US dollars have been invested in blockchain start-ups, reflecting the potential market seen by investors. Here in the UK, the use of third party intermediary clearing houses is ingrained in our financial service systems. Services such as the CHAPS payment system, providing same day bank transfers, the more recently launched Faster Payments Scheme, providing real time interbank payments for low value transaction, the use of card scheme-backed payment cards, such as VISA and Mastercard, and the trading of shares via the London Stock Exchange, all involve the use of a clearing house to seek to identify the transacting parties and minimise fraud. The use of clearing houses carries an administrative overhead and an associated cost. For example, a CHAPS payment will typically incur a £35 charge and a credit card payment will cost the retailer several per cent of the transaction value, a cost which is ultimately passed to the consumer. The key benefit of blockchain technology is that it enables two parties to transact directly with each other without the involvement of the third party intermediary, saving time and cost and therefore making micro payments much more viable. While the card schemes and merchant acquirers have been offering lower transaction charges for contactless payments in order to accelerate adoption of the technology, the use of blockchain technology to support peer-to-peer transactions must give the card schemes significant cause for concern. Indeed, whilst card schemes are quick to highlight the potential weaknesses of blockchain, the card schemes are also exploring how the technology can be used to support the remittances business. A further benefit of blockchain is the distributed ledger technology provides an indestructible digital record of actions. A helpful analogy used by others is that blockchain is like a beaded necklace, each bead (or 'block') is a record of an action (whether a payment or otherwise) and that action is proven by the beads immediately before and after it. Within the payments industry, blockchain effectively proves where the money came from and where it has gone to (albeit the identity of the individuals who have received and sent payment can be hidden, hence the use of Bitcoin for illegal activities such as the well known "Silk Road" online black market). As the ledger of transactions is distributed in duplicate to the computers of users around the world and updating in real time, that ledger is not susceptible to attack in the same way as a single ledger held by a single institution. Blockchain can be used not only for digital currency, such as Bitcoin, but also to enable individuals to verify their identity by capturing information such as the individual's birth certificate, National Insurance number, passport details, driver's licence and other pertinent information to enable the individual to create a Legal Entity Identifier (LEI) to readily prove their identity, dramatically speeding up the "know your customer" and anti-money laundering identification checks, so that signing up for financial products can be much more straightforward. This also strengthens the enforceability of electronic signatures, an increasingly important process in our digital world. Whilst the press have readily leapt on stories showing the use of blockchain technology for illegal purposes (such as the use of Bitcoin on the Silk Road), there are many possibilities for using this technology for positive socio-economic benefit. Being able to prove your identity using blockchain could make significant inroads into getting the 'unbanked banked'. Immigration is a key issue facing Europe at present and getting immigrants housed, into work and integrated into modern life, including obtaining a bank account, could be made so much more straightforward if the individual has a personal blockchain to prove that individual's identity. Only a few weeks ago, BlockCrushr Labs also unveiled a solution using blockchain technologies to ensure that funds given to buy meals and other necessities are spent for their intended purpose. The solution addresses the reduction in the number of people who carry cash, by allowing people to anonymously load "digital food wallets" of homeless people through common payment methods such as smartphones, credit cards and Paypal. The "smart wallets" can be spent securely at participating food retailers. On a less serious note, blockchain is triggering the proliferation of digital currency such as the recent launch of 'Sweatcoins' awarded using an iPhone app to track the user's steps. Reminiscent of the introduction of in-car telematics to reduce car insurance premiums, Sweatcoin's co-founder is in talks with health insurers about using Sweatcoin stats to calculate health risks for policy premiums. Whilst blockchain technology may not be straightforward for the consumer to understand, the resulting convenience and ease of use means that mainstream adoption can only be a matter of time. Stay on that station platform, the blockchain train is arriving soon. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. ]]>{6DB3B081-F525-4D03-B417-AC1B03B02377}https://www.shoosmiths.co.uk/services/technology-10383.aspxTechnology /* use [h]text[/h] to hightlight word [nl] for new line */ var carousel_data = [ // img: "PATH TO BACKGROUND IMG", title: "Title [h]hightline[/h] [nl]new line [h]highlight[/h]", sig: "button right sig", LinkText: 'This is a link (OPTIONAL)', Link: '#test (OPTIONAL)', textPos: "right/left (OPTIONAL)", color:"white-text (OPTIONAL)" { img: "/images/double_width_images/carousel-blank.png", title: "[h]EPIC:[/h] ENSURE YOUR[nl]WEBSITE OR APP[nl]IS LEGALLY[nl]COMPLIANT", alt: "", LinkText: 'Read more', Link: 'http://www.shoosmiths.co.uk/services/epic-make-your-online-site-or-app-legally-compliant-9856.aspx', textPos: "left", color:"white-text" } ]; $(function () { $.each(carousel_data, function (i, item) { if (i > 0) { item.printClass = "no-print"; } item.title = item.title.replace(/\[h\]/g, '<span>'); item.title = item.title.replace(/\[\/h\]/g, '</span>'); item.title = item.title.replace(/\[nl\]/g, '<br>'); }); $(".js-carousel-large .items").html($("#carousel-simple-template").render(carousel_data)); $('.text-float h2').html(carousel_data[0].title); if (carousel_data[0].sig) { $('.ui-carousel-sig').html(carousel_data[0].sig); }else{ $('.ui-carousel-sig').hide(); } if (carousel_data[0].subHeading) { $('.ui-carousel-subheading').html(carousel_data[0].subHeading); } $('.text-float').attr("class", "text-float"); if (carousel_data[0].color) { $('.text-float').addClass(carousel_data[0].color); } $('.text-float').addClass(carousel_data[0].textPos); if (carousel_data[0].Link) { $('.ui-carousel-link').addClass("ui-carousel-sig-button").html('<a class="ui-button ui-button-white ui-button-arrow-lr" href="' + carousel_data[0].Link + '" title="' + carousel_data[0].LinkText + '"><span class="ui-button-icon"></span>' + carousel_data[0].LinkText + '</a>'); } else { $('.ui-carousel-link').empty().removeClass("ui-carousel-sig-button"); } /* if there is more than one item then load in the scrollable carousel */ if ($(".js-carousel-large .items .item").length > 1) { $(".js-carousel-large").scrollable({ circular: true, onBeforeSeek: function () { $('.ui-carousel-sig, .ui-carousel-link, .text-float, .ui-carousel-subheading').hide(); }, onSeek: function (item, number) { $('.text-float').fadeTo(300, 1); ind = this.getIndex(); $('.text-float').attr("class", "text-float"); $('.text-float').addClass(carousel_data[ind].textPos); if (carousel_data[ind].color) { $('.text-float').addClass(carousel_data[ind].color); } $('.text-float h2').html(carousel_data[ind].title); if (carousel_data[ind].Link) { $('.ui-carousel-link').show().addClass("ui-carousel-sig-button").html('<a class="ui-button ui-button-white ui-button-arrow-lr" href="' + carousel_data[ind].Link + '" title="' + carousel_data[0].LinkText + '"><span class="ui-button-icon"></span>' + carousel_data[ind].LinkText + '</a>'); } else { $('.ui-carousel-link').removeClass("ui-carousel-sig-button").empty(); } if (carousel_data[ind].subHeading) { $('.ui-carousel-subheading').text(carousel_data[ind].subHeading).show(); } else { $('.ui-carousel-subheading').empty().hide(); } if (carousel_data[ind].sig) { $('.ui-carousel-sig').text(carousel_data[ind].sig).show(); } else { $('.ui-carousel-sig').hide(); } } }).autoscroll({ interval: 6000 }).navigator(); } }); <div class="item {{:printClass}}"> <div class="image"><img src="{{:img}}" alt="{{:alt}}"></div> </div> <!-- "previous page" action --> <!-- injected IF ONLY ONE ITEM THEN IT DOES NOT ROTATE OR SHOW NAV--> <!-- end .navigation --> <!-- end .carousel --> Technology &quot;At Shoosmiths LLP, 'all matters are dealt with promptly, and the level of business acumen and knowledge is first class.'&quot; Legal 500 <!-- end .quote --> <!-- end .bg-quote --> <!-- end .quote-wrapper --> Shoosmiths' top tier ranked technology practice pulls together a national team of experts who advise both customers and suppliers on a broad range of technology solutions including: IT outsourcing Our team advises on the legal and commercial risks associated with IT outsourcing projects, such as offshoring and reshoring risks, multi sourcing arrangements (including the use of the SIaM model), innovative pricing structures and cohesive service level regimes. IT systems procurement Our team advises on software and hardware procurement and we use the benefit of our past experience of dealing with the global software and hardware vendors to provide pragmatic advice regarding those contractual positions which such vendors will concede and ensure that the contract terms reflect current market practice. Our broad experience of advising on large IT procurements means that we appreciate the differing negotiations strategies of the largest vendors and the potential contractual advantages of contracting through value added resellers. Software development (including agile methodology) Agile software development requires a very different mindset to the traditional "waterfall" approach to software development. We take a very different approach to advising on agile development contracts and understand the fundamental distinctions between agile development and the traditional approach to software development. Cloud services Cloud service providers are waking up to customer concerns such as data privacy, service continuity, service suspension and return of data on exit. We can help mitigate the key business risks associated with cloud services, including the structuring of private and hybrid cloud structures where confidentiality is a particularly sensitive issue. Case study During 2013 we were appointed by a FTSE 10 client to provide intensive support to its IT legal function, acting as an extension of client's IT legal team in London and offshore. This has resulted in Shoosmiths providing circa 1,000 hours of support in latter part of 2013 alone, working on in excess of 30 Information Technology matters, many of which have had a global dimension. This assignment has been very time intensive, requiring significant resource from across the Shoosmiths' IT team and has demonstrated to the client the size and expertise of Shoosmiths' IT team. <!-- .ui-article --> Key contacts View all Technology contacts Craig Armstrong Partner M 07765 805691 T 03700 86 4138 Email me <!-- .ui-contacts-details --> Joseph Stephenson Partner T 03700 864228 Email me <!-- .ui-contacts-details --> Technology &quot;At Shoosmiths LLP, 'all matters are dealt with promptly, and the level of business acumen and knowledge is first class.'&quot; Legal 500 <!-- end .quote --> <!-- end .bg-quote --> <!-- end .quote-wrapper --> Shoosmiths' top tier ranked technology practice pulls together a national team of experts who advise both customers and suppliers on a broad range of technology solutions including: IT outsourcing Our team advises on the legal and commercial risks associated with IT outsourcing projects, such as offshoring and reshoring risks, multi sourcing arrangements (including the use of the SIaM model), innovative pricing structures and cohesive service level regimes. IT systems procurement Our team advises on software and hardware procurement and we use the benefit of our past experience of dealing with the global software and hardware vendors to provide pragmatic advice regarding those contractual positions which such vendors will concede and ensure that the contract terms reflect current market practice. Our broad experience of advising on large IT procurements means that we appreciate the differing negotiations strategies of the largest vendors and the potential contractual advantages of contracting through value added resellers. Software development (including agile methodology) Agile software development requires a very different mindset to the traditional "waterfall" approach to software development. We take a very different approach to advising on agile development contracts and understand the fundamental distinctions between agile development and the traditional approach to software development. Cloud services Cloud service providers are waking up to customer concerns such as data privacy, service continuity, service suspension and return of data on exit. We can help mitigate the key business risks associated with cloud services, including the structuring of private and hybrid cloud structures where confidentiality is a particularly sensitive issue. Case study During 2013 we were appointed by a FTSE 10 client to provide intensive support to its IT legal function, acting as an extension of client's IT legal team in London and offshore. This has resulted in Shoosmiths providing circa 1,000 hours of support in latter part of 2013 alone, working on in excess of 30 Information Technology matters, many of which have had a global dimension. This assignment has been very time intensive, requiring significant resource from across the Shoosmiths' IT team and has demonstrated to the client the size and expertise of Shoosmiths' IT team.Tue, 15 Sep 2015 00:00:00 +0100<![CDATA[Craig Armstrong Joseph Stephenson ]]><![CDATA[ /* use [h]text[/h] to hightlight word [nl] for new line */ var carousel_data = [ // img: "PATH TO BACKGROUND IMG", title: "Title [h]hightline[/h] [nl]new line [h]highlight[/h]", sig: "button right sig", LinkText: 'This is a link (OPTIONAL)', Link: '#test (OPTIONAL)', textPos: "right/left (OPTIONAL)", color:"white-text (OPTIONAL)" { img: "/images/double_width_images/carousel-blank.png", title: "[h]EPIC:[/h] ENSURE YOUR[nl]WEBSITE OR APP[nl]IS LEGALLY[nl]COMPLIANT", alt: "", LinkText: 'Read more', Link: 'http://www.shoosmiths.co.uk/services/epic-make-your-online-site-or-app-legally-compliant-9856.aspx', textPos: "left", color:"white-text" } ]; $(function () { $.each(carousel_data, function (i, item) { if (i > 0) { item.printClass = "no-print"; } item.title = item.title.replace(/\[h\]/g, '<span>'); item.title = item.title.replace(/\[\/h\]/g, '</span>'); item.title = item.title.replace(/\[nl\]/g, '<br />'); }); $(".js-carousel-large .items").html($("#carousel-simple-template").render(carousel_data)); $('.text-float h2').html(carousel_data[0].title); if (carousel_data[0].sig) { $('.ui-carousel-sig').html(carousel_data[0].sig); }else{ $('.ui-carousel-sig').hide(); } if (carousel_data[0].subHeading) { $('.ui-carousel-subheading').html(carousel_data[0].subHeading); } $('.text-float').attr("class", "text-float"); if (carousel_data[0].color) { $('.text-float').addClass(carousel_data[0].color); } $('.text-float').addClass(carousel_data[0].textPos); if (carousel_data[0].Link) { $('.ui-carousel-link').addClass("ui-carousel-sig-button").html('<a class="ui-button ui-button-white ui-button-arrow-lr" href="' + carousel_data[0].Link + '" title="' + carousel_data[0].LinkText + '"><span class="ui-button-icon"></span>' + carousel_data[0].LinkText + '</a>'); } else { $('.ui-carousel-link').empty().removeClass("ui-carousel-sig-button"); } /* if there is more than one item then load in the scrollable carousel */ if ($(".js-carousel-large .items .item").length > 1) { $(".js-carousel-large").scrollable({ circular: true, onBeforeSeek: function () { $('.ui-carousel-sig, .ui-carousel-link, .text-float, .ui-carousel-subheading').hide(); }, onSeek: function (item, number) { $('.text-float').fadeTo(300, 1); ind = this.getIndex(); $('.text-float').attr("class", "text-float"); $('.text-float').addClass(carousel_data[ind].textPos); if (carousel_data[ind].color) { $('.text-float').addClass(carousel_data[ind].color); } $('.text-float h2').html(carousel_data[ind].title); if (carousel_data[ind].Link) { $('.ui-carousel-link').show().addClass("ui-carousel-sig-button").html('<a class="ui-button ui-button-white ui-button-arrow-lr" href="' + carousel_data[ind].Link + '" title="' + carousel_data[0].LinkText + '"><span class="ui-button-icon"></span>' + carousel_data[ind].LinkText + '</a>'); } else { $('.ui-carousel-link').removeClass("ui-carousel-sig-button").empty(); } if (carousel_data[ind].subHeading) { $('.ui-carousel-subheading').text(carousel_data[ind].subHeading).show(); } else { $('.ui-carousel-subheading').empty().hide(); } if (carousel_data[ind].sig) { $('.ui-carousel-sig').text(carousel_data[ind].sig).show(); } else { $('.ui-carousel-sig').hide(); } } }).autoscroll({ interval: 6000 }).navigator(); } }); <div class="item {{:printClass}}" > <div class="image"><img src="{{:img}}" alt="{{:alt}}"/></div> </div> <!-- "previous page" action --> <!-- injected IF ONLY ONE ITEM THEN IT DOES NOT ROTATE OR SHOW NAV--> <!-- end .navigation --> <!-- end .carousel --> Technology &quot;At Shoosmiths LLP, 'all matters are dealt with promptly, and the level of business acumen and knowledge is first class.'&quot; Legal 500 <!-- end .quote --> <!-- end .bg-quote --> <!-- end .quote-wrapper --> Shoosmiths' top tier ranked technology practice pulls together a national team of experts who advise both customers and suppliers on a broad range of technology solutions including: IT outsourcing Our team advises on the legal and commercial risks associated with IT outsourcing projects, such as offshoring and reshoring risks, multi sourcing arrangements (including the use of the SIaM model), innovative pricing structures and cohesive service level regimes. IT systems procurement Our team advises on software and hardware procurement and we use the benefit of our past experience of dealing with the global software and hardware vendors to provide pragmatic advice regarding those contractual positions which such vendors will concede and ensure that the contract terms reflect current market practice. Our broad experience of advising on large IT procurements means that we appreciate the differing negotiations strategies of the largest vendors and the potential contractual advantages of contracting through value added resellers. Software development (including agile methodology) Agile software development requires a very different mindset to the traditional "waterfall" approach to software development. We take a very different approach to advising on agile development contracts and understand the fundamental distinctions between agile development and the traditional approach to software development. Cloud services Cloud service providers are waking up to customer concerns such as data privacy, service continuity, service suspension and return of data on exit. We can help mitigate the key business risks associated with cloud services, including the structuring of private and hybrid cloud structures where confidentiality is a particularly sensitive issue. Case study During 2013 we were appointed by a FTSE 10 client to provide intensive support to its IT legal function, acting as an extension of client's IT legal team in London and offshore. This has resulted in Shoosmiths providing circa 1,000 hours of support in latter part of 2013 alone, working on in excess of 30 Information Technology matters, many of which have had a global dimension. This assignment has been very time intensive, requiring significant resource from across the Shoosmiths' IT team and has demonstrated to the client the size and expertise of Shoosmiths' IT team. <!-- .ui-article --> Key contacts View all Technology contacts Craig Armstrong Partner M 07765 805691 T 03700 86 4138 Email me <!-- .ui-contacts-details --> Joseph Stephenson Partner T 03700 864228 Email me <!-- .ui-contacts-details --> Technology &quot;At Shoosmiths LLP, 'all matters are dealt with promptly, and the level of business acumen and knowledge is first class.'&quot; Legal 500 <!-- end .quote --> <!-- end .bg-quote --> <!-- end .quote-wrapper --> Shoosmiths' top tier ranked technology practice pulls together a national team of experts who advise both customers and suppliers on a broad range of technology solutions including: IT outsourcing Our team advises on the legal and commercial risks associated with IT outsourcing projects, such as offshoring and reshoring risks, multi sourcing arrangements (including the use of the SIaM model), innovative pricing structures and cohesive service level regimes. IT systems procurement Our team advises on software and hardware procurement and we use the benefit of our past experience of dealing with the global software and hardware vendors to provide pragmatic advice regarding those contractual positions which such vendors will concede and ensure that the contract terms reflect current market practice. Our broad experience of advising on large IT procurements means that we appreciate the differing negotiations strategies of the largest vendors and the potential contractual advantages of contracting through value added resellers. Software development (including agile methodology) Agile software development requires a very different mindset to the traditional "waterfall" approach to software development. We take a very different approach to advising on agile development contracts and understand the fundamental distinctions between agile development and the traditional approach to software development. Cloud services Cloud service providers are waking up to customer concerns such as data privacy, service continuity, service suspension and return of data on exit. We can help mitigate the key business risks associated with cloud services, including the structuring of private and hybrid cloud structures where confidentiality is a particularly sensitive issue. Case study During 2013 we were appointed by a FTSE 10 client to provide intensive support to its IT legal function, acting as an extension of client's IT legal team in London and offshore. This has resulted in Shoosmiths providing circa 1,000 hours of support in latter part of 2013 alone, working on in excess of 30 Information Technology matters, many of which have had a global dimension. This assignment has been very time intensive, requiring significant resource from across the Shoosmiths' IT team and has demonstrated to the client the size and expertise of Shoosmiths' IT team.]]>{BAD69C72-6658-4DF3-8A72-28AD089AC949}https://www.shoosmiths.co.uk/client-resources/legal-updates/technology-franchising-new-challenges-for-franchisors-9893.aspxTechnology in franchising: new challenges for franchisors - part one Technology now touches most, if not all, business areas, and franchising is no different. More than ever prospective and current franchisors need to be mindful of how technology can enhance, but also presents challenges for, their franchise offering. Franchisee technology expectations and 'the Cloud' Franchisors are under pressure to invest in and provide their franchisees with technology solutions to support their franchises, such as payroll software or customer/client management systems (ie CRM systems). Now it is also common for communication with franchisees to be facilitated via extranet (a website that only franchisees can access). These solutions are beneficial for franchisors as they positively impact sales and save money by streamlining payment methods/processing, and can be used to implement further new technology into its franchise network. Given the development and increased confidence in 'the cloud', it is becoming easier for franchisors to deliver these types of software to their franchise networks. Harnessing cloud-based services enables software to be more widely distributed and accessible as it's not required physically on a franchisee's hardware and allows multiple franchisees to access data, at the same time, from multiple locations. This negates the need for upfront capital investment in hardware and other equipment to support such software and provides a readily scalable solution to franchisees. Franchisors can now also use cloud-based technologies to obtain greater transparency of the performance of its franchisees. For example, fast and accurate reporting and data analysis against metrics (ie by reference to a franchisor's operating manual). All this is available at a franchisor's fingertips, which could signify an era of automated compliance and franchisor 'big brother' activity, with more scrutiny of franchisee compliance and/or target achievement. This could encourage increased productivity. However, prior to undertaking any such data analytics, franchisors will need to evaluate the potential data protection implications of their activities. If such data consists of franchisee customer data, franchisees should be collecting the relevant data subjects' consents to the applicable use of such data (which may be difficult, depending on the goods/services being sold to end customers). Franchisors may also want to consider possible efficiencies that could be created in providing training online (ie via webinars, virtual conferences and conference calls), or operating online knowledge platforms (for example, as a document and knowledge facility and forum). If a cloud approach is adopted franchisors may also want to consider the devices on which such software is to be utilised. For instance, in order to save capital outlay, a franchisor may want to consider opting for a 'bring your own device' policy. Deciding which technology to use Given the above, it is imperative that a franchisor carefully considers which (if any) technology solutions to implement and how, with regard to how such technology will stimulate a return on investment. If a franchisor is undecided it may want to consider discussing the same with a franchising consultant, other franchisors (whether facilitated via the British Franchise Association or International Franchise Association networks) and in particular, the International Franchise Association's Information Technology Committee (being a body providing free of charge professional advice, contributed to by franchisors and ICT suppliers). Trend towards e-commerce E-commerce and online shopping is a staggering, global, trillion dollar industry and is expected to continue to grow. It's therefore more important now than ever for each franchisor to carefully plan internet strategy for its franchised business (including web presence, social media strategy and utilisation of search engine optimisation), and to consider the opportunities and threats presented by authorising or enabling its franchise network to harness e-commerce and, more specifically, the ever growing m-commerce industry. Franchisees are increasingly targeting clients online, and as such seeking to operate websites to further develop their individual businesses, which can present the following questions: Will the franchisor operate a central website/app for the benefit of the entire franchise network (the costs of which could, for example, be flowed down to the franchisees as part of any applicable marketing/advertising levy)? Will the franchisees be authorised to procure and/or operate their own, separate, local websites/apps? For further consideration of the challenges these questions pose to franchisors, please see our next article on Technology in franchising - new challenges for franchisors - part two. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Mon, 15 Jun 2015 00:00:00 +0100<![CDATA[ Technology now touches most, if not all, business areas, and franchising is no different. More than ever prospective and current franchisors need to be mindful of how technology can enhance, but also presents challenges for, their franchise offering. Franchisee technology expectations and 'the Cloud' Franchisors are under pressure to invest in and provide their franchisees with technology solutions to support their franchises, such as payroll software or customer/client management systems (ie CRM systems). Now it is also common for communication with franchisees to be facilitated via extranet (a website that only franchisees can access). These solutions are beneficial for franchisors as they positively impact sales and save money by streamlining payment methods/processing, and can be used to implement further new technology into its franchise network. Given the development and increased confidence in 'the cloud', it is becoming easier for franchisors to deliver these types of software to their franchise networks. Harnessing cloud-based services enables software to be more widely distributed and accessible as it's not required physically on a franchisee's hardware and allows multiple franchisees to access data, at the same time, from multiple locations. This negates the need for upfront capital investment in hardware and other equipment to support such software and provides a readily scalable solution to franchisees. Franchisors can now also use cloud-based technologies to obtain greater transparency of the performance of its franchisees. For example, fast and accurate reporting and data analysis against metrics (ie by reference to a franchisor's operating manual). All this is available at a franchisor's fingertips, which could signify an era of automated compliance and franchisor 'big brother' activity, with more scrutiny of franchisee compliance and/or target achievement. This could encourage increased productivity. However, prior to undertaking any such data analytics, franchisors will need to evaluate the potential data protection implications of their activities. If such data consists of franchisee customer data, franchisees should be collecting the relevant data subjects' consents to the applicable use of such data (which may be difficult, depending on the goods/services being sold to end customers). Franchisors may also want to consider possible efficiencies that could be created in providing training online (ie via webinars, virtual conferences and conference calls), or operating online knowledge platforms (for example, as a document and knowledge facility and forum). If a cloud approach is adopted franchisors may also want to consider the devices on which such software is to be utilised. For instance, in order to save capital outlay, a franchisor may want to consider opting for a 'bring your own device' policy. Deciding which technology to use Given the above, it is imperative that a franchisor carefully considers which (if any) technology solutions to implement and how, with regard to how such technology will stimulate a return on investment. If a franchisor is undecided it may want to consider discussing the same with a franchising consultant, other franchisors (whether facilitated via the British Franchise Association or International Franchise Association networks) and in particular, the International Franchise Association's Information Technology Committee (being a body providing free of charge professional advice, contributed to by franchisors and ICT suppliers). Trend towards e-commerce E-commerce and online shopping is a staggering, global, trillion dollar industry and is expected to continue to grow. It's therefore more important now than ever for each franchisor to carefully plan internet strategy for its franchised business (including web presence, social media strategy and utilisation of search engine optimisation), and to consider the opportunities and threats presented by authorising or enabling its franchise network to harness e-commerce and, more specifically, the ever growing m-commerce industry. Franchisees are increasingly targeting clients online, and as such seeking to operate websites to further develop their individual businesses, which can present the following questions: Will the franchisor operate a central website/app for the benefit of the entire franchise network (the costs of which could, for example, be flowed down to the franchisees as part of any applicable marketing/advertising levy)? Will the franchisees be authorised to procure and/or operate their own, separate, local websites/apps? For further consideration of the challenges these questions pose to franchisors, please see our next article on Technology in franchising - new challenges for franchisors - part two. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. ]]>{0F32942C-58AC-436B-AFDC-664325F75FF3}https://www.shoosmiths.co.uk/client-resources/legal-updates/big-data-big-deal-9293.aspxBig data, big deal? The first week of each New Year sees the International Consumer Electronics Show (CES) roll into Las Vegas, providing an annual glimpse into the future of consumer technology. Dubbed the proving ground for breakthrough technologies where next-generation innovations are introduced to the marketplace, this year's event saw predictions for an increasingly 'connected' and 'smart' future. As the 'Internet of Things' gathers momentum, the role of technology is undergoing a gradual shift from the foreground to a more omnipresent and assistive background function. The vast majority of everyday objects are now capable of connecting to both the internet and each other, and the concepts of 'predictive analytics' and 'the quantified self' are gaining popularity as businesses seek to offer consumers an increasingly streamlined and efficient experience. The unavoidable by-product of this technological advancement is 'big data'; the extremely large, raw digital data sets that may be analysed computationally to reveal patterns in user behaviour. Big data is fast becoming the hottest commodity in a contemporary gold rush, with anticipated global growth at a rate of 40% per year and businesses seeking new and innovative ways to commercialise it in their quest for competitive advantage. From a legal perspective, when seeking to extract value from big data, the fundamental implications of ownership, data protection and privacy need to be considered. It is estimated that 2.2 million terabytes of new data is created every day. To put this into perspective, that is roughly 128 million times more than the capacity of the average smart phone in your pocket! With 90% of the world's data being created in the last two years, ownership is a rapidly emerging concept. While the existing concept of database right grants an absolute right of ownership to the person 'obtaining, verifying and presenting' the content of a database, dealing with unstructured big data is a green field for lawyers. In a big data driven world, data subjects are increasingly unaware of who their information is being shared with, and for what purpose(s). With such a large amount of data available and the potential to amalgamate data from various big data sources and ultimately profile an individual, it is clear that there are significant legal challenges ahead. For businesses hoping to overcome these legal and regulatory difficulties, an outright rejection to making data more widely available risks ignoring its inherent value. To maximise the true value of big data, the focus needs to be on the nature and quality of any data captured. If this data is personal, is the retention of it necessary at all? If so, can it be suitably anonymised? With 49% of consumers now saying that they are less willing to share their personal data, effective data collection and data processing policies have never been more important. Businesses must seek to build customer confidence and trust through integrated approaches to big data; ensuring that they have the right people and infrastructure in place to optimise it as a genuine 'value driver'. One thing is for sure, big data is here to stay and an effective strategy is becoming an increasingly important way of securing competitive advantage in the marketplace. The unprecedented proliferation of big data presents an interesting and unique challenge to the legal profession and an opportunity for lawyers to showcase innovative thinking; enabling their clients to extract value from this virtual commodity, whilst remaining fully compliant and within the law. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Wed, 25 Feb 2015 00:00:00 Z<![CDATA[Craig Armstrong ]]><![CDATA[ The first week of each New Year sees the International Consumer Electronics Show (CES) roll into Las Vegas, providing an annual glimpse into the future of consumer technology. Dubbed the proving ground for breakthrough technologies where next-generation innovations are introduced to the marketplace, this year's event saw predictions for an increasingly 'connected' and 'smart' future. As the 'Internet of Things' gathers momentum, the role of technology is undergoing a gradual shift from the foreground to a more omnipresent and assistive background function. The vast majority of everyday objects are now capable of connecting to both the internet and each other, and the concepts of 'predictive analytics' and 'the quantified self' are gaining popularity as businesses seek to offer consumers an increasingly streamlined and efficient experience. The unavoidable by-product of this technological advancement is 'big data'; the extremely large, raw digital data sets that may be analysed computationally to reveal patterns in user behaviour. Big data is fast becoming the hottest commodity in a contemporary gold rush, with anticipated global growth at a rate of 40% per year and businesses seeking new and innovative ways to commercialise it in their quest for competitive advantage. From a legal perspective, when seeking to extract value from big data, the fundamental implications of ownership, data protection and privacy need to be considered. It is estimated that 2.2 million terabytes of new data is created every day. To put this into perspective, that is roughly 128 million times more than the capacity of the average smart phone in your pocket! With 90% of the world's data being created in the last two years, ownership is a rapidly emerging concept. While the existing concept of database right grants an absolute right of ownership to the person 'obtaining, verifying and presenting' the content of a database, dealing with unstructured big data is a green field for lawyers. In a big data driven world, data subjects are increasingly unaware of who their information is being shared with, and for what purpose(s). With such a large amount of data available and the potential to amalgamate data from various big data sources and ultimately profile an individual, it is clear that there are significant legal challenges ahead. For businesses hoping to overcome these legal and regulatory difficulties, an outright rejection to making data more widely available risks ignoring its inherent value. To maximise the true value of big data, the focus needs to be on the nature and quality of any data captured. If this data is personal, is the retention of it necessary at all? If so, can it be suitably anonymised? With 49% of consumers now saying that they are less willing to share their personal data, effective data collection and data processing policies have never been more important. Businesses must seek to build customer confidence and trust through integrated approaches to big data; ensuring that they have the right people and infrastructure in place to optimise it as a genuine 'value driver'. One thing is for sure, big data is here to stay and an effective strategy is becoming an increasingly important way of securing competitive advantage in the marketplace. The unprecedented proliferation of big data presents an interesting and unique challenge to the legal profession and an opportunity for lawyers to showcase innovative thinking; enabling their clients to extract value from this virtual commodity, whilst remaining fully compliant and within the law. DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. ]]>{F33D9043-A439-4917-A5B8-1B1B319B7D81}https://www.shoosmiths.co.uk/client-resources/legal-updates/ico-issues-enforcement-notice-office-data-security-breach-9027.aspxICO issues Enforcement Notice in response to Office data security breach Shoe retailer, Office, has become the latest retailer to have its knuckles wrapped by the Information Commissioner's Office (ICO) following a data protection breach which resulted in more than one million customer records being exposed. Background On 29 May 2014, the ICO was informed that a member of the public had hacked into an unencrypted historic database owned by Office. The database involved was in the process of being de-commissioned and was being held on a legacy server outside the core infrastructure of its current website. Whilst certain technical measures were in place in order to minimise the risk of a data security breach taking place, these measures were not adequate and, as a result, a hacker was able to gain access to personal data relating to more than one million customers including their contact details and website passwords. No financial information was accessed. The reason why Office had chosen to retain this historic information (some of which had become inaccurate) was to mitigate the risks associated with migration to its new system. However, in hindsight they consider that this approach may have been overly cautious and that it was not strictly necessary to retain this information. What the Data ProtectionAct 1998 (Act) requires? Principles 5 and 7 of the Act require that organisations processing personal data: Do not store it for longer than necessary; and Put in place appropriate technical and organisational measures to protect it It was these two Principles which Office failed to satisfy. In particular, the ICO determined that Office had retained customer information held on the legacy database for longer than necessary and had failed to implement adequate security measures to protect it. It also noted that Office did not provide any formal data protection training to its staff and didn't have a data retention policy in place. What action did the ICO take? The ICO exercised its powers under Section 40 of the Act and issued an Enforcement Notice to the Office. In which, it ordered Office to enter into an Undertaking to ensure that personal data is processed in line with the fifth and seventh Data Protection Principles. In particular by:- Ensuring that all its websites and servers are subject to regular penetration testing Implementing new data protection policy documents within 3 months and ensuring that these include policies on the retention and disposal of customer data Providing formal training to all its employees along with refresher training at regular intervals; and Implementing such other security measures as are appropriate to ensure that personal data is protected What can you do? If you are concerned about whether or not your organisation is complying with the requirements of the Act or are unsure about what exactly the Act requires, please contact Aisling Duffy on 03700865089 or aisling.duffy@shoosmiths.co.uk DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Thu, 22 Jan 2015 00:00:00 Z<![CDATA[Nicky Jenkins ]]><![CDATA[ Shoe retailer, Office, has become the latest retailer to have its knuckles wrapped by the Information Commissioner's Office (ICO) following a data protection breach which resulted in more than one million customer records being exposed. Background On 29 May 2014, the ICO was informed that a member of the public had hacked into an unencrypted historic database owned by Office. The database involved was in the process of being de-commissioned and was being held on a legacy server outside the core infrastructure of its current website. Whilst certain technical measures were in place in order to minimise the risk of a data security breach taking place, these measures were not adequate and, as a result, a hacker was able to gain access to personal data relating to more than one million customers including their contact details and website passwords. No financial information was accessed. The reason why Office had chosen to retain this historic information (some of which had become inaccurate) was to mitigate the risks associated with migration to its new system. However, in hindsight they consider that this approach may have been overly cautious and that it was not strictly necessary to retain this information. What the Data ProtectionAct 1998 (Act) requires? Principles 5 and 7 of the Act require that organisations processing personal data: Do not store it for longer than necessary; and Put in place appropriate technical and organisational measures to protect it It was these two Principles which Office failed to satisfy. In particular, the ICO determined that Office had retained customer information held on the legacy database for longer than necessary and had failed to implement adequate security measures to protect it. It also noted that Office did not provide any formal data protection training to its staff and didn't have a data retention policy in place. What action did the ICO take? The ICO exercised its powers under Section 40 of the Act and issued an Enforcement Notice to the Office. In which, it ordered Office to enter into an Undertaking to ensure that personal data is processed in line with the fifth and seventh Data Protection Principles. In particular by:- Ensuring that all its websites and servers are subject to regular penetration testing Implementing new data protection policy documents within 3 months and ensuring that these include policies on the retention and disposal of customer data Providing formal training to all its employees along with refresher training at regular intervals; and Implementing such other security measures as are appropriate to ensure that personal data is protected What can you do? If you are concerned about whether or not your organisation is complying with the requirements of the Act or are unsure about what exactly the Act requires, please contact Aisling Duffy on 03700865089 or aisling.duffy@shoosmiths.co.uk DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. ]]>{91A6750C-C879-45EE-9294-B54B332F495C}https://www.shoosmiths.co.uk/client-resources/legal-updates/retail-feeling-the-new-year-hangover-8991.aspxRetail: Feeling the New Year hangover? Black Friday and the Boxing Day sales have been and gone, and retailers could be forgiven for breathing a sigh of relief and pausing to take stock. However, the payment card schemes and merchant acquirers are likely to be less accommodating if your business has failed to implement PCI DSS 3.0 which became mandatory on 1 January 2015 (although a handful of requirements remain solely best practice until 1 July 2015 when they too will become mandatory). But what are the risks of non-compliance to a retailer? From a contractual perspective it is worth noting that the retailer's merchant acquirer will have ensured that it can pass down to the retailer any PCI DSS non-compliance fines imposed by a card scheme. Perhaps of even greater concern, the financial impact of a security breach on a retailer's reputation can be far more significant. A recent poll revealed 45% of US credit and debit card holders are likely to avoid retailers that have been affected by a data breach in the last year (bad news for the likes of Target and Home Depot!). Yet despite these risks, Retail Week reported prior to Christmas that as many as 9 in 10 retailers have failed to achieve compliance without remediation work and overall levels of compliance remain less than 40%. The key messages in PCI DSS version 3.0 are education awareness, making the security steps 'business as usual', and security as a shared responsibility. New requirements that should be noted include: Implementation of a penetration testing methodology and perform penetration testing to verify that segmentation methods are operational and effective Maintain an inventory of system components which are in scope for PCI DSS Improved training and oversight of point of terminal devices to reduce tampering and theft As always, retailers should discuss security with service providers to ensure that they have secured their systems appropriately. For example, web and database servers should be hardened to disable default passwords, settings and unnecessary services. Where appropriate, software should also conform to Payment Application Data Security Standard (PA-DSS) requirements and we find that this requirement is often overlooked when new software and cloud based-services are being procured. PCI DSS 3.0 can be obtained from the PCI Security Standards website, here. Perhaps the slow period of late January provides an ideal opportunity to verify compliance? DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Mon, 19 Jan 2015 00:00:00 Z<![CDATA[Craig Armstrong ]]><![CDATA[ Black Friday and the Boxing Day sales have been and gone, and retailers could be forgiven for breathing a sigh of relief and pausing to take stock. However, the payment card schemes and merchant acquirers are likely to be less accommodating if your business has failed to implement PCI DSS 3.0 which became mandatory on 1 January 2015 (although a handful of requirements remain solely best practice until 1 July 2015 when they too will become mandatory). But what are the risks of non-compliance to a retailer? From a contractual perspective it is worth noting that the retailer's merchant acquirer will have ensured that it can pass down to the retailer any PCI DSS non-compliance fines imposed by a card scheme. Perhaps of even greater concern, the financial impact of a security breach on a retailer's reputation can be far more significant. A recent poll revealed 45% of US credit and debit card holders are likely to avoid retailers that have been affected by a data breach in the last year (bad news for the likes of Target and Home Depot!). Yet despite these risks, Retail Week reported prior to Christmas that as many as 9 in 10 retailers have failed to achieve compliance without remediation work and overall levels of compliance remain less than 40%. The key messages in PCI DSS version 3.0 are education awareness, making the security steps 'business as usual', and security as a shared responsibility. New requirements that should be noted include: Implementation of a penetration testing methodology and perform penetration testing to verify that segmentation methods are operational and effective Maintain an inventory of system components which are in scope for PCI DSS Improved training and oversight of point of terminal devices to reduce tampering and theft As always, retailers should discuss security with service providers to ensure that they have secured their systems appropriately. For example, web and database servers should be hardened to disable default passwords, settings and unnecessary services. Where appropriate, software should also conform to Payment Application Data Security Standard (PA-DSS) requirements and we find that this requirement is often overlooked when new software and cloud based-services are being procured. PCI DSS 3.0 can be obtained from the PCI Security Standards website, here. Perhaps the slow period of late January provides an ideal opportunity to verify compliance? DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. ]]>{BF3B7649-7E47-43E5-8A79-47B382CD53FD}https://www.shoosmiths.co.uk/news/press-releases/shoosmiths-supports-design-manchester-2014-8519.aspxShoosmiths supports Design Manchester 2014 National law firm Shoosmiths is backing this year's Design Manchester festival through its keynote industry address North: The Great Debate. Download hi-res image Now in its second year, Design Manchester is a week long festival of design from across the UK. Sponsored by Manchester City Council, the Design Council, the RSA and the Department for Culture. It is being held in Manchester Town Hall and in other venues across the city this week. Design Manchester celebrates creativity, collaboration and inclusivity in the worlds of art, design, illustration, animation and photography and seeks to both inspire and educate. The festival also takes place at the same time as Manchester Science festival and several events will overlap to help highlight the relationship between world-class design and science and technology. Curated by renowned graphic designer Malcolm Garrett of Images&amp;Co &amp; John Owens of Instruct, other participants include internationally renowned design luminaries such as Hollywood production designer Alex MacDowell, Peter Saville and Rejane Dall Bello. The festival will culminate in an industry debate on 29 October at Manchester School of Art's Stirling Prize-nominated Benzie Building, produced by Kasper de Graaf of Images&amp;Co. The invited audience will comprise key figures working in the design sphere in the north and throughout the country. The debate will focus on the topic of design and devolution and will examine how the creative industries are driving the regional economy. The panel chaired by The Observer's Robert Yates comprises Sir Richard Leese, leader of Manchester City Council, Lou Cordwell, CEO of digital design agency, Magnetic North, Caroline Norbury, Chief Executve of Creative England and Professor David Crow of Manchester School of Art. Laura Harper, partner and head of Manchester's IP &amp; Creative industries practice at Shoosmiths, said: 'Design Manchester 2014 and in particular North: The Great Debate brings together many of the businesses and professionals which make up the region's dynamic and active design sector and wider creative industries. Having supported these companies on regional, national and international projects over the years, I have seen diversification and innovation in businesses and service offerings during this time which have led directly to growth and job creation. 'We are delighted to be a part of this event together with many of our clients and contacts. The vibrant creative sector is key to the region's economy and debates like this one help to identify important issues and inform the best way forward for the sector as a whole. 'As a practice, in addition to providing excellent legal support we pride ourselves in our understanding of the sector and the issues faced by those within it. Our involvement in collaborative events like this debate helps us to keep this understanding current and fits in perfectly with the ethos of the practice which is to provide accessible, quality legal support to our clients in the creative industries and digital sector. 'That's why the team here at Shoosmiths is so proud to support this event and others like it in the city. We work closely with many of the city and region's leading creative and digital companies and are always ready to help and advise creative entrepreneurs.' Festival co-curator Malcolm Garrett RDI commented: 'It takes more than creative talent to build a vibrant creative industry. Manchester has always punched above its weight in its contribution to music, arts and culture, and one important reason is our willingness to cross boundaries. 'Shoosmiths have helped many creatives turn their talent into successful companies by contributing wider expertise and understanding of the business environment. They are a natural partner in this debate and we are delighted that they are supporting us.' Find out more about Design Manchester 14 here: www.designmcr.com and Shoosmiths here: www.shoosmiths.co.uk Laura Harper is a partner in Shoosmiths' national IP &amp; creative industries group and heads the team in the Manchester office. Immersed in the sector, she helps her clients to protect and commercialise the work they produce. She acts for a broad range of creative and digital businesses from multi-national technology companies, major fashion brands, communications agencies including advertising and design agencies, digital agencies and PR companies through to product design and manufacturing companies, film and TV production companies, music businesses, publishing, gaming and software businesses, arts organisations, individual designers, writers, artists and musicians. Laura divides her time between Shoosmiths' Manchester office at Spinningfields, in the heart of the city's business and finance district, and also the dedicated creative industries office at The Sharp Project, Manchester's multi-million pound creative digital media hub.Tue, 21 Oct 2014 00:00:00 +0100<![CDATA[Laura Harper ]]><![CDATA[ National law firm Shoosmiths is backing this year's Design Manchester festival through its keynote industry address North: The Great Debate. Download hi-res image Now in its second year, Design Manchester is a week long festival of design from across the UK. Sponsored by Manchester City Council, the Design Council, the RSA and the Department for Culture. It is being held in Manchester Town Hall and in other venues across the city this week. Design Manchester celebrates creativity, collaboration and inclusivity in the worlds of art, design, illustration, animation and photography and seeks to both inspire and educate. The festival also takes place at the same time as Manchester Science festival and several events will overlap to help highlight the relationship between world-class design and science and technology. Curated by renowned graphic designer Malcolm Garrett of Images&amp;Co &amp; John Owens of Instruct, other participants include internationally renowned design luminaries such as Hollywood production designer Alex MacDowell, Peter Saville and Rejane Dall Bello. The festival will culminate in an industry debate on 29 October at Manchester School of Art's Stirling Prize-nominated Benzie Building, produced by Kasper de Graaf of Images&amp;Co. The invited audience will comprise key figures working in the design sphere in the north and throughout the country. The debate will focus on the topic of design and devolution and will examine how the creative industries are driving the regional economy. The panel chaired by The Observer's Robert Yates comprises Sir Richard Leese, leader of Manchester City Council, Lou Cordwell, CEO of digital design agency, Magnetic North, Caroline Norbury, Chief Executve of Creative England and Professor David Crow of Manchester School of Art. Laura Harper, partner and head of Manchester's IP &amp; Creative industries practice at Shoosmiths, said: 'Design Manchester 2014 and in particular North: The Great Debate brings together many of the businesses and professionals which make up the region's dynamic and active design sector and wider creative industries. Having supported these companies on regional, national and international projects over the years, I have seen diversification and innovation in businesses and service offerings during this time which have led directly to growth and job creation. 'We are delighted to be a part of this event together with many of our clients and contacts. The vibrant creative sector is key to the region's economy and debates like this one help to identify important issues and inform the best way forward for the sector as a whole. 'As a practice, in addition to providing excellent legal support we pride ourselves in our understanding of the sector and the issues faced by those within it. Our involvement in collaborative events like this debate helps us to keep this understanding current and fits in perfectly with the ethos of the practice which is to provide accessible, quality legal support to our clients in the creative industries and digital sector. 'That's why the team here at Shoosmiths is so proud to support this event and others like it in the city. We work closely with many of the city and region's leading creative and digital companies and are always ready to help and advise creative entrepreneurs.' Festival co-curator Malcolm Garrett RDI commented: 'It takes more than creative talent to build a vibrant creative industry. Manchester has always punched above its weight in its contribution to music, arts and culture, and one important reason is our willingness to cross boundaries. 'Shoosmiths have helped many creatives turn their talent into successful companies by contributing wider expertise and understanding of the business environment. They are a natural partner in this debate and we are delighted that they are supporting us.' Find out more about Design Manchester 14 here: www.designmcr.com and Shoosmiths here: www.shoosmiths.co.uk Laura Harper is a partner in Shoosmiths' national IP &amp; creative industries group and heads the team in the Manchester office. Immersed in the sector, she helps her clients to protect and commercialise the work they produce. She acts for a broad range of creative and digital businesses from multi-national technology companies, major fashion brands, communications agencies including advertising and design agencies, digital agencies and PR companies through to product design and manufacturing companies, film and TV production companies, music businesses, publishing, gaming and software businesses, arts organisations, individual designers, writers, artists and musicians. Laura divides her time between Shoosmiths' Manchester office at Spinningfields, in the heart of the city's business and finance district, and also the dedicated creative industries office at The Sharp Project, Manchester's multi-million pound creative digital media hub.]]>{CF810EAF-C78B-40EC-85F6-74F72A94F09B}https://www.shoosmiths.co.uk/client-resources/legal-updates/plans-force-it-provide-services-insolvent-customers-8438.aspxDon&#39;t leave me this way? Plans to force IT suppliers to continue to provide services to insolvent customers The Insolvency Service is undertaking a consultation exercise regarding a plan to ensure the continuity of supply of IT services to insolvent companies in a similar manner to the current legislation regarding the supply of essential utilities. The effect of the proposed order would mean that many IT suppliers may not be able to use their current contractual right to terminate their agreement with the customer or charge extra fees in the event of their customer going into administration or entering into a voluntary arrangement. The challenge for the IT industry is that unlike the utilities sector, it is made up of a large number of small to medium sized enterprises, particularly in the reseller sector. These businesses face significant cash flows issues and the failure to receive payment (whilst still being expected to provide services and so incur costs) is likely to pose real financial difficulties for them. This will be exacerbated by the limited availability and rising cost of overdrafts for these businesses. Introducing a turnover/profit test may provide some protection for the smaller end of the sector, but may pose a barrier to growth. The draft order does give the supplier the right to apply to court for permission to terminate the contract if the supplier believes that being required to continue to supply will cause them "undue hardship", but it is unclear what this would constitute. Alternatively, the supplier may require the administrator to provide a personal guarantee in respect of the payment of the contract charges, failing which the supplier is entitled to terminate the contract. In our experience many larger businesses (particularly those in the financial services industry) are already alive to the issue of continuity of IT services and have managed to secure contractually the protection they need for critical IT services. These contractual rights typically go beyond the administration/voluntary arrangement limit discussed in this consultation and usually the supplier's right to terminate is limited to non-payment of invoices over a certain threshold value. So in some respects this proposed legislative change reflects the contractual practice of larger businesses with greater commercial leverage. Responses to the consultation exercise must be submitted by Wednesday 8th October and so remaining time is short to submit a response. Any client wishing to be assisted with the submission of their response should contact Craig Armstrong or Amanda Coale. https://www.gov.uk/government/consultations/continuity-of-supply-of-essential-services-to-insolvent-businesses DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Thu, 02 Oct 2014 00:00:00 +0100<![CDATA[Craig Armstrong ]]><![CDATA[ The Insolvency Service is undertaking a consultation exercise regarding a plan to ensure the continuity of supply of IT services to insolvent companies in a similar manner to the current legislation regarding the supply of essential utilities. The effect of the proposed order would mean that many IT suppliers may not be able to use their current contractual right to terminate their agreement with the customer or charge extra fees in the event of their customer going into administration or entering into a voluntary arrangement. The challenge for the IT industry is that unlike the utilities sector, it is made up of a large number of small to medium sized enterprises, particularly in the reseller sector. These businesses face significant cash flows issues and the failure to receive payment (whilst still being expected to provide services and so incur costs) is likely to pose real financial difficulties for them. This will be exacerbated by the limited availability and rising cost of overdrafts for these businesses. Introducing a turnover/profit test may provide some protection for the smaller end of the sector, but may pose a barrier to growth. The draft order does give the supplier the right to apply to court for permission to terminate the contract if the supplier believes that being required to continue to supply will cause them "undue hardship", but it is unclear what this would constitute. Alternatively, the supplier may require the administrator to provide a personal guarantee in respect of the payment of the contract charges, failing which the supplier is entitled to terminate the contract. In our experience many larger businesses (particularly those in the financial services industry) are already alive to the issue of continuity of IT services and have managed to secure contractually the protection they need for critical IT services. These contractual rights typically go beyond the administration/voluntary arrangement limit discussed in this consultation and usually the supplier's right to terminate is limited to non-payment of invoices over a certain threshold value. So in some respects this proposed legislative change reflects the contractual practice of larger businesses with greater commercial leverage. Responses to the consultation exercise must be submitted by Wednesday 8th October and so remaining time is short to submit a response. Any client wishing to be assisted with the submission of their response should contact Craig Armstrong or Amanda Coale. https://www.gov.uk/government/consultations/continuity-of-supply-of-essential-services-to-insolvent-businesses DisclaimerThis document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. ]]>